Jo Swinson: Despite the efforts of the Government and many hon. Members on both sides of the House to publicise pension credit entitlements, nearly 90,000 pensioners across Scotland are missing out on the pension credit to which they are entitled. Does the Minister think that that highlights the injustice of the complex and bureaucratic means-tested system of pensions? Surely it is high time that we moved to a system in which the Government paid a decent state pension, as of right, to everyone?

John Hutton: A number of factors explain the significant increase in the lone parent employment rate. Obviously, the strength of the economy generally has helped; so, too, has the new deal for lone parents. The hon. Member for Reading, East (Mr. Wilson) should know that it has helped more than 400 lone parents in his constituency to get back to work—a policy that his Front-Bench team opposes. The policy of making work pay through tax credits, the national minimum wage and now the in-work credit for lone parents who come off benefit and into work have made it possible for us to increase substantially the rate of employment for lone parents. However, we need to do more. That is obviously the case. It is what Freud highlighted and it is what we are now looking to do.

Anne Snelgrove: what his assessment is of progress in reducing the number of people on inactive benefits.

Jim Murphy: My hon. Friend is absolutely right. David Freud has suggested an innovative and imaginative way of supporting existing incapacity benefit customers. The core point is that no one should ever be written off, which has happened for so long in our welfare system. One in six of current incapacity benefit customers have dependent children, so there is a real opportunity to lift those families out of poverty.

Philip Dunne: what discussions he has had at the UN on the recent UNICEF report on child poverty.

David Taylor: While it is in the House's interest to drive up rates of recycling, as the hon. Member for North Devon (Nick Harvey) mentioned, is it not in the national interest that we drive down the recycling of waste draft policies emanating from the Opposition Front Bench, which fall apart at the first examination in the first light of day? Is it not in the national interest to minimise all that effort?

Tony Blair: With permission, Mr Speaker, I shall make a statement about the European Council summit that took place in Brussels on 8 and 9 March.
	There were three main agenda items for the summit. First, the Council agreed to cut the administrative burden arising from EU legislation by 25 per cent by the year 2012. This has long been a key British objective. It was a major part of the United Kingdom presidency of the EU in 2005, and it mirrors our own Government's decision made last year. This decision makes another clear break with traditional European policy on regulation, and is hugely to be welcomed. It follows up a recent Commission decision to withdraw some 78 pieces of legislation—the first time that the EU has done that. I congratulate the Commission, and especially President Barroso and Commissioner Verheugen, on their determination. The decision has full British support.
	Secondly, the Council agreed on an action plan to liberalise the energy market. The centrepiece is to free up the distribution of energy across the European Union to create a genuinely competitive, interconnected and Europe-wide internal energy market. That will bring major benefits for EU consumers, improve the security of supply, and strengthen European competitiveness. The European Council decided in particular that supply and production activities should be separated from network distribution to allow competition on the networks, as already happens in the UK.
	Ever since the Hampton Court summit of October 2005, energy liberalisation and security of supply have been key objectives of ours for the European market. It is true that we still need to do more in Europe, especially in respect of the vertical integration of energy companies. Nevertheless, this means that for the first time, at least at distribution level, British companies can compete on equal terms with French or German companies—in particular, in France and Germany, not just here in the UK. That will bring reduced costs to business and to customers, and again it has our full support.
	Thirdly, and most importantly, the European Council committed itself for the first time to a binding Europe-wide environment target: a 20 per cent. reduction in greenhouse gas emissions by 2020, compared with 1990. Moreover, the European Union undertook to go further and achieve a 30 per cent. reduction in emissions by 2020, if this was part of a wider international agreement. Until last week, no group of countries had committed itself to such deep reductions. This is a landmark decision, which will mean changes in all member states' domestic policies.
	The Council also agreed on a binding commitment that renewable energy will comprise some 20 per cent. of overall EU energy consumption by 2020. However, the agreement allows for differentiated national targets within that overall EU objective. In particular, it recognises that for some member states, nuclear energy will play a significant role in achieving overall climate change targets.
	The Council agreed a 20 per cent increase in energy efficiency, again by 2020. It also recognised the importance of clean coal technology. We welcomed the Commission's undertaking to support, by 2015, the construction and operation of up to a dozen commercial-scale clean coal demonstration plants, with a view to all new coal-fired power stations' being fitted with carbon capture and storage technology by 2020. That technology must be a crucial element in the overall response to the climate change challenge, and it is important that we signal that to investors now. Clean coal can be part of the future.
	All these targets impel us towards a far more ambitious European emissions trading scheme. The Commission President is currently negotiating country-by-country caps on emissions for 2008-12. Britain, as he has acknowledged, has helped by setting an ambitious cap for itself. The Commission has proposed that after 2011, aviation should also be within the ETS. We want to make the scheme more transparent, and we want it extended after 2012 to 2020 and beyond. All these proposals are set out in our recent paper to our European colleagues, and we are actively building the alliances in Europe to ensure that they are implemented.
	Of course, these European commitments must be part of wider international action. As the Stern review demonstrated, without concerted international action there will be disastrous consequences for global economic development. The European Council therefore reaffirmed the importance of agreeing a long-term framework to address climate change. It set out a coherent and united vision for how such a wider international agreement would work. It paves the way for further action on climate change at the G8 summit in Germany in June.
	This is, in the end, the crucial prize. It is important that we take action here in Britain, as tomorrow's climate change Bill will show. It is critical for the EU then to show leadership, as it did at the summit in a remarkable and ground-breaking way. For those who doubt the relevance of the European Union to today's world, last week's Council meeting and its historic agreement on climate change is the best riposte. It shows Europe following the concerns of its people, and giving real leadership to the rest of the world.
	But ultimately only an agreement that is global and includes America, China and India will halt the damage of rising greenhouse gas emissions. Everything else is, of course, justified in its own right, but this is, most of all, a means to that end. The G8 plus 5 dialogue which was started at Gleneagles under the UK presidency in 2005, and which has all the main countries within it, is the forum in which new principles for an international framework can be agreed. The summit in Germany this June will be the time to agree those principles, including a stabilisation goal, a route to a truly global carbon market, support for new technology, adaptation measures and action on deforestation. This is the next stage of the journey to effective multilateral global action on what is the single biggest long-term threat to our world.
	Let me conclude by paying tribute to the leadership of Chancellor Merkel at the European summit. The agenda was bold and she carried it superbly. Unsurprisingly, as the matters it addressed were all fundamental British objectives, we were able to give that leadership full and active support. Once again, that shows the significance of strong, constructive and positive engagement in Europe.

Malcolm Rifkind: Was the Prime Minister personally involved in the drafting of the presidency conclusion on Palestine, which says that the European Union would deal with a Palestinian Government which
	"adopts a platform reflecting the Quartet principles".
	Does he accept that that is, in a characteristically European way, a fudge, and will he give a clear assurance that the British Government will not deal with Hamas as long as it continues to support suicide bombing and the complete destruction of the state of Israel—which is, indeed, what it reaffirmed in a statement this morning?

David Winnick: I wish to take up a comment that my right hon. Friend made a few moments ago. Although all Palestinian factions should recognise the existence of Israel's pre-1967 borders, is he aware that the while the European Council was meeting many of us saw on television Israeli troops using Palestinian children as human shields, clearly in defiance of international law? What protest will be made by the European Council, the British Government and, I hope, the United States Government about what the Israelis are doing and what we have seen on television, which is totally unacceptable?

Tony Blair: Europe has generated millions more jobs in the past few years, but we still have levels of unemployment that are far too high. We also need a labour market that is more geared to employability, rather than a more old-fashioned view of the social dimension. It depends to a great extent on the Commission being allowed, and being given support by member states, to take measures on liberalising the European market and on making sure that we support our work force through training, education and skills—active labour market policies, rather then old-style regulation. That is the agenda that we will push. The good news is that the Commission is on the same track. We need to ensure that all member states are on the same track.

Tony Blair: I think that I am right in saying that the increase in air passenger duty will cost significantly less, certainly for most domestic travel, than VAT on airline fuel or the proposals of the Leader of the Opposition. The most important thing is that whatever we do, we do it Europe wide. I am not saying that we cannot do certain things domestically, but we must be careful to get the balance right, as I said. I think that those proposals do not.

Bob Spink: What action is the Prime Minister and Europe taking to ensure that the global price for carbon will enable the carbon trading policies to work effectively?

Tony Blair: The way in which the emissions trading system works is to set a cap on emissions for each individual country and it trades the permits within that system. Basically, the price is set through the cap. Progressively, we need to lower the cap so that the carbon price is transparent and the necessary incentive is given for business and industry to develop the science and technology to deal with it.
	Incidentally, I agree that we have to be careful in the way in which permits are traded, but the single most important thing is to be able, progressively over time, to reduce that cap. If we could get a situation whereby there were other regional emission trading systems and they at some point linked up, that would probably be the best route to a global carbon trading system, which is, in the end, what we need.

Kevin Barron: The hon. Gentleman will see exactly what we tried to do in the report. We dealt with how to manage the situation where deficits, historical or otherwise, are a very high percentage of the turnover of one organisation while at the same time being fair to other organisations in the NHS and to the taxpayer. Basically, deficits are about overspending. Whether historical or not, they are overspend against the budgets allotted to each individual constituent part of the NHS.
	My own view—I have said it for many months now—is that that problem has to be addressed in the interest of the taxpayer and in the interest of the NHS. We cannot have all this extra money being invested only to find out that there is still overspending. Often we do not know exactly where the money has gone or whether it is improving productivity and so forth. Under those circumstances, these are big issues. I would not want to argue—neither did the Committee, to its good sense—that where there are massive overspends or deficits, we should not find some mechanism for dealing with them. It is up to the Government, who run the organisation, to find out how they can make people more responsible than they have been in health communities in the past where overspend has taken place.
	One of the biggest issues for me—I speak from a personal level—was how the Government decided this current financial year to take on the matter of the overspend or deficits by seeking to balance the books nationally by the end of the financial year. They sought to do so on the basis of top-slicing. It certainly hurt my health community when more than £7 million was withheld from the Rotherham primary care trust, but I am pleased to say that that came out of growth money rather than current services. If it were not for that, I would have been even stronger in my criticism of top-slicing, which was done to bring back some discipline.
	I have a question for my hon. Friend the Minister. Paragraph 26 of the Government's response to the Select Committee report states:
	"We agree that top-slicing of PCT allocations to create SHA reserves is a temporary expedient,"—
	the Committee agreed with that—
	"with 2006-07 contributions being returned to the originating organisations as soon as possible."
	According to the quarter three returns of the NHS finances that were published on 20 February, there is a suggestion that £300 million could be paid back from the top-slicing within the year in which the top-slicing has taken place. That is my understanding of the situation; if that is correct, will my hon. Friend tell me how that money will be paid back, and to which primary care trusts or NHS organisations?
	Ministers have already told us that, in many instances, top-slicing has taken place in areas where there are high levels of health inequality. Those are the last places in which we should be holding back national health service expenditure, not the first. The top-slicing took place as a percentage across the board in SHA communities. If that money is to be repaid within the year, how will that be brought about? In Yorkshire and the Humber, for example, will a percentage be given back to all the NHS trusts? I will not bore the House with the details, but if we look at the health inequalities in that area, we see that there is great diversity there, although there was no diversity involved in the top-slicing. Perhaps my hon. Friend can respond to that point at some stage.
	I should like to move on to the contingency plans. The Government had planned to set up what we called a buffer in relation to the present in-year problems. They said that it was not a buffer, but it related to the top-slicing. In paragraph 31 of their response to the Select Committee report, they state:
	"No additional resources would be provided by Government for these purposes."
	That is, for the purposes of dealing with the current overspend. Given that nowhere near all the deficits will be cleared by the end of this financial year, what action can we expect to be taken next year by SHAs? Will we see the repayment of the £300 million—if my analysis is correct—in this financial year, only for further top-slicing to take place in 2007-08? I would like my hon. Friend to answer that question as well.
	The lack of a failure strategy to deal with in-year problems was not acted on quickly, but the Government are now talking about the implementation of a formal failure strategy in response to our criticisms. Will my hon. Friend tell the House what the situation is, in that regard?
	The hon. Member for Hemel Hempstead (Mike Penning) mentioned the funding formula. The Committee took evidence from three professors for our report, and I think that we heard four different interpretations of the funding formula on that occasion. We were trying to determine whether the formula disadvantaged rural areas, and it would only be fair to say that that was denied by our witnesses. I note, however, that page 6 of the report that I mentioned earlier—which was placed on the website by the Department on 20 December—stated:
	"Since deficits are found to be more prevalent in rural areas, further investigation of the costs and organisational aspects of servicing rural populations is recommended."
	In the report, the Government say that the formula is being considered by the relevant committee. How long is it likely to be before we get an explanation or interpretation of whether the funding formula impacts negatively on rural areas?

Kevin Barron: The Department mentioned six areas in its executive summary in relation to the current deficits, and that is certainly one of them.
	My hon. Friend the Minister will be familiar with the cuts in education and training budgets. Given the overspend in certain areas, those seemed to be easy targets. Effectively, budgets are held by SHAs and are consequently easy to hold back in order to balance national budgets. The Government said, in paragraph 65 of their response:
	"Although...funding will not be ring fenced—
	for which we had asked, because of the raids, so to speak, in the current financial year—
	"there will be a more robust service level agreement which will seek to ensure that SHA decisions on what training to fund and the level of commissions of training places requires are made on the basis of long term workforce need."
	The Health Committee will, I hope, agree a report on work force planning later this week, and no doubt the House will debate the matter again. I would be interested, however, to know exactly what the Government mean by the phrase, "robust service level agreement".
	Cuts to vulnerable services were also criticised. Numerous witnesses suggested that mental health and public health expenditure were the easier targets in health care. Several organisations wrote to us to make that point. The Government effectively denied that in their response. They said:
	"However, improving financial management does not mean compromising services for patients. To ensure that these services are not compromised the Department of Health has asked SHAs to ensure that local changes to spending plans are equitable across the local health economy, and that NHS organisations providing mental health and learning disability services should not be asked to contribute more in savings or cost improvement plans than any other service".
	I accept that entirely as it is written, but none of the three services that I have mentioned has national targets set. When services do have national targets, the NHS believes that those must be met. Under those circumstances, it is right and proper to say that matters should be equitable, but do we have equity when there are national targets and when some areas of the national health service have had such problems recently?
	On the delay in recognising deficits, the analytical body said in its report that the NHS's inability to recognise the implications of changes in resource account budgeting and therefore what was likely to happen in the particular year was one of the major problems.
	The Government responded, and I am pleased that they did. We had said
	"We are surprised that it took so long for the unsustainable financial commitments which trusts were undertaking to be recognised."
	The Government's response was
	"We have changed this financial focus, and, in the context of greater transparency, now encourage the NHS to plan towards achieving surpluses."
	That represents a big change in the culture of the national health service.
	I remember, many years ago when I was an Opposition health spokesman, reading Audit Commission reports showing that the priority of hospitals at this time of year was to spend their budgets immediately. If they did not do so, regardless of whether they needed the relevant equipment, the budget would be withheld from them in the following financial year. Has that changed? Rather than spending all its annual budget, can a part of the NHS—while not making a profit—keep some money that can be rolled over into the next financial year? That could help the NHS to plan for different departments.

Kevin Barron: Let me read out the Government's response again:
	"We have changed this financial focus, and, in the context of greater transparency, now encourage the NHS to plan towards achieving surpluses."
	That is very plain, and very specific. It is in paragraph 80 of the Government's response. I think I know what the Government mean by it; all I want to know is whether organisations would lose any money that they did not spend in any one year. I do not think that that is necessarily wrong, but it is a major issue.
	Will the trust that has not been overspending—it might be spending up to the mark because it feels that it has to do so as the end of March is coming up—be able to save however many millions of pounds are involved and then take that into the next year with no consequences for the following year's expenditure? That is important.
	The Health Committee was very critical of what we call the failure of financial management inside the national health service. I am pleased that the Government have accepted that
	"within the highly complex NHS system, day-to-day financial management practice has not always been of a consistently high standard."
	Many of us agree with that.
	We also criticised the role of finance directors. Indeed, some NHS organisations—some with budgets of more than £200 million or £300 million per annum—did not have what would be called a finance director who is responsible to the board for the income and expenditure of the organisation. I am pleased that the Government have now said:
	"A national training programme for Strategic Financial Leadership is in the process of being set up and every organisation will be expected to support their Finance Director in attending this programme."
	However, the end of that statement is a little thin, so I ask how far we have got now in setting that up. If we are to avoid the situation that has arisen in the last few years—and probably decades—in the national health service of there being overspending which is hidden by this type of brokerage, it is important that people have confidence that their finance directors know exactly what is happening and what should be happening and that they are looking after the interests of both the taxpayer and the people who use the national health service.
	I shall not carry on much longer as I know that other Members wish to contribute. The whole issue of national health service deficits arose early last year, and question marks still hang over some aspects of it. I have posed a few questions this afternoon, to which I hope that my hon. Friend the Minister will respond and I am sure that other Members will have other questions to ask. It is crucial that the taxpayer—and everybody else—knows exactly how their money is being spent inside the national health service.
	When the Health Committee comes to report later this year, we will have further thoughts on how we have ended up in our current situation in respect of at least one other area that we shall look at. I hope that Members agree that some progress has been made in the past few weeks in explaining the history of national health service deficits and in finding a mechanism for tackling the problems that some trusts face. Some parts of the national health service still face deep problems because of their amounts of overspend, regardless of whether that overspend is historical—they have inherited it—or they have created it themselves. The Government need to address these issues soon.

Sandra Gidley: I shall come to that point later. There has been a problem with cascading from national level to strategic health authority level to trust level exactly what is required at each level, and I will elaborate slightly on it later.
	According to the report on the third quarter financial returns, the aim is to achieve recurrent monthly run-rate balance by the end of the financial year, so it is disappointing to learn that 17 trusts are still not in a position to deliver it. Can the Minister say what else is being done to help those trusts? Although turnaround teams have been sent into some areas at considerable cost, it seems that some trusts have specific problems that are still not being resolved if they cannot balance their books from one month to the next.
	My next point is about strategic health authorities. At the last election, our policy was to scrap them, and it seems to have been well justified. What are strategic health authorities for? Let us consider the simple subject of staffing numbers. The Government had a NHS plan. It would have been fairly obvious to subdivide that into different areas so that each SHA would know the numbers of staff who should be taken on. It could then scrutinise the PCTs—given that the bodies were supposed to be strategic, I understood that they were supposed to scrutinise the PCTs. Instead, there was an absolute explosion in staff, with some trusts taking on staff whom they could not afford—the Committee heard evidence to that effect. In many cases, those staff were taken on simply to address a short-term problem or target. Nobody but nobody appeared to have an overview of the system, and no one put the brakes on before it ran completely out control. We are where we are today as a result.
	There have been national problems with the implementation of some policies. No hon. Member would deny any member of staff a pay increase or a decent wage. The Government reviewed the pay of health service staff through "Agenda for Change". They also introduced the GP contract—it has become known as the "controversial" GP contract—and the consultant contract. Each of those went over budget by a considerable amount. "Agenda for Change" cost £220 million more than was expected. The GP contract cost £250 million and the consultant contract cost £90 million. The projected figures for 2006-07 suggest that "Agenda for Change" will cost an additional £394 million more than what was expected, while the consultant contract will cost £48 million. Again, it is strange that there was insufficient financial scrutiny at the heart of the Government to make the budgets more reflective of the reality.
	Let me outline some particular concerns. The top-slicing of the budgets of PCTs and other trusts has been somewhat controversial. The simple fact remains that it has pushed some trusts into deficit. According to the third quarter financial review, 35 per cent. of organisations are forecasting deficits, but that figure would be only 24 per cent. if the impact of top-slicing and the previous year's deficit could be ignored. The process seems to be a more formalised way of moving resources around the system than the old-fashioned approach, which the right hon. Member for Rother Valley mentioned, under which who should take the deficit each year was determined by Buggins's turn.
	I have a further concern about education and training. When the Secretary of State was questioned by the Committee about the raiding of the training budgets, she said:
	"I am very reluctant to go down the ring fencing route."
	However, doctors who are halfway through their training cannot access courses and the intakes of schools of nursing have been drastically reduced. That has a long-term effect. That approach might seem like a simple one-year solution, but one cannot expect schools of nursing and midwifery to reduce the numbers on their courses by a third or a half in one year and then revert to the previous position a year later. It is not fair to expect a single organisation to deliver in such a way.
	The Secretary of State did not appear to have an answer to the situation, although she referred repeatedly to difficult decisions. When the hon. Member for Staffordshire, Moorlands (Charlotte Atkins) said:
	"Let us make sure that stealing money from the training budget does not become habit forming",
	the right hon. Lady said, "I would endorse that." However, it is sad that she does not appear to want to do anything positive and concrete to try to ensure that such a situation does not arise in the future.
	The right hon. Member for Rother Valley talked about vulnerable groups. Paragraph 76 of the Government's response is a little helpful because it says:
	"improving financial management does not mean compromising services to patients. To ensure that these services are not compromised the Department of Health has asked SHAs to ensure that local changes to spending plans are equitable across the local health economy, and that NHS organisations providing mental health and learning disability services should not be asked to contribute more in savings or cost improvement plans than any other service, unless the mental health or learning disability services contributed to the deficit."
	That is all very well, but it only covers the issues of mental health and learning difficulties. As the hon. Member for Peterborough (Mr. Jackson) said, other services have been cut dramatically, too.
	The Terrence Higgins Trust has undertaken research that shows that much of the money earmarked for sexual health services has not reached its target destination. The problem, of course, is that not many Members of Parliament have people queuing up, or knocking on their door, to make a surgery appointment because they cannot get an appointment at the local sexual health services clinic. It does not happen; it is not something that people really want their MP to know about. Sexual health services are an easy target, and the Government should do more to ensure that the money for those services stays where it is. Removing that money is a short-term, unhelpful solution, because if people cannot access those services, they will carry on spreading disease, and we will end up with a bigger problem. Is that really what the Government want?

Charlotte Atkins: That would not surprise me at all, because as I said, only 45 of those 150 redundancies were compulsory. Eight nurses were made compulsorily redundant—other nurses took voluntary redundancy. However, I do not wish to underplay the seriousness of the situation. A number of nurses who, traditionally, could expect to be employed by the local hospital, could not secure jobs. Now the local hospital is taking more nurses from Keele university, but many nurses have decided, because they have had offers, to go to Australia. That might be a fantastic experience—I am not suggesting otherwise—but the situation has led to some soul searching in the area.
	North Staffordshire is an area of low skills, and we cannot afford to lose that valuable skills base. However, what worries me most is that clear mismanagement at the hospital was not picked up. It is accountable to the strategic health authority, but to whom is the strategic health authority accountable? It is responsible for the performance management of trusts in its area, and it seems that it was asleep on the job. All the signs were there. The chief executive announced that he was leaving his job 13 months before he was due to go, but in all that time the hospital did not manage to find an adequate and effective replacement.
	The report by the Select Committee on Health found that there is no failure strategy in the NHS. There should have been a strategy that kicked in at that point, and people should have said, "Hold on, there are alarm bells sounding here—we must take this in hand." When the scale of the problem was finally revealed, members of the hospital's management board resigned en masse. A new chief executive, Antony Sumara, was brought in, who made a very good job of sorting out the mess. He made much better use of theatres and day surgery. It is a sprawling hospital on three separate sites, and he rationalised activities on different sites to ensure that it worked more efficiently. However, even he could not do everything, because the hospital buildings are up to 150 years old, so there was a big challenge. We hoped that he would stay put after his year's contract expired, and there certainly were suggestions that he would do so. But that has not happened. He was obviously headhunted to go elsewhere.
	We now have an acting chief executive, who I am sure is doing all she can, but I do not know whether the management of the hospital is getting the support that it needs. Its task it not just to manage a dilapidated hospital. We are to have significant and very welcome investment in a new maternity and oncology block that is due to open in two years. It represents an investment of £71 million from the Department of Health. At the same time, the plans for building a new PFI hospital are well advanced. There are several balls in the air, and the acting chief executive may not be getting the support that she deserves. Because of past performance, I have no great faith in the strategic health authority to supply that support.
	A real worry for everybody, especially patients, is the fact that infection rates remain stubbornly high. I know that much work has been done to reduce infection rates and meet Government targets, but I wonder whether the failure to get those rates down is a symptom of a wider problem. I hope not. When I talk to my constituents about their experience in the NHS, particularly in that hospital, by and large I get very good reports. It is only people who have not had recent experience of the NHS who say it is a shambles. However, experience in the hospital can vary from ward to ward. When my own daughter was in that hospital, her experience varied from ward to ward. She saw quite a few different wards, sadly.
	The primary care trust in my area is doing much better. We merged two primary care trusts, and I am grateful to Ministers for overruling the strategic health authority and supporting local people in our fight for a local PCT. The record of that PCT has justified Ministers' confidence in it. It is brilliantly led by the chief executive, Tony Bruce. As a result, the PCT is expected to be in balance this year, while achieving all the Government's expectations and ambitions. It would have been in surplus if it had not been top-sliced. As Tony Bruce told me the other day, the next two years are crucial, not just because NHS finances will be tighter, but because we have to make the right investment decisions now to ensure that we improve the lives and reduce the dependency of patients.

Charlotte Atkins: Absolutely. The decision to ensure that the PFI hospital went ahead in a slightly smaller form was sensible, because we could have ended up with a white elephant—a huge hospital that would not have been fit for purpose in the 21st century because so many good things are going on in the local PCT area. We are sending far fewer people to hospital. Central out-patients has had a reduction of 20 per cent. in GP referrals because of the work that GPs and PCTs are doing locally to prevent the admission of patients to hospital.
	The work that is being done locally to make sure that patients are less dependent and do not end up in the acute sector is to be praised, but there must be consistency. My local PCT, the North Staffordshire Primary Care Trust, is doing a fantastic job in that respect, but I am not convinced that that is happening countrywide. We must resolve those issues. If we do not, the increasingly elderly population will mean that we find ourselves in another crisis.
	The Department of Health cannot micro-manage the NHS; it has to be down to local organisations to do that. I am pleased that PCTs and trusts now have to achieve financial balance. The need to balance the books has driven much of the good change that we have seen. It has been necessary to drive down costs and deliver value for money, but in my area that has not been at the cost of patient care—in fact, it has improved patient care. We have introduced community matrons; I think that there was a financial incentive to do that, in the context of reducing acute admissions. We also have deep-vein thrombosis testing locally in Leek, the prevention of falls programme—again expertly led at the local Leek hospital—and PhysioDirect, which allows physiotherapists to treat people without a doctor's appointment. All those services have ensured that care is delivered locally, where people want it, and not in the acute sector.
	I very much welcome the transparency that has come with the tightening of the NHS financial regime. In the past, we had constant rumours about how Staffordshire had lent vast sums of money to, say, Shropshire, but it was never clear on what basis that was done and whether interest rates were paid; I do not think that they were. We were never really informed of what was going on. Now the financial position of each organisation is known. Many PCTs resent the top-slicing of their allocations, but I hope that that is only a short-term measure, and that PCTs will be able to manage their local budgets appropriately and not have to shore up the strategic health authority balances.
	The Select Committee suggested that some deficits were down to the growth in staff costs. To some extent, that was a result of pay rises and GP and consultant contracts, but it was also a result of the vast increase in the number of staff. I have no particular difficulty with GPs being paid more, as long as they deliver more for patients. It cannot be right for doctors to claim payments for access to their services, in terms of appointments, when some are clearly not doing that. It is important for PCTs to police the contracts properly, so that where doctors are getting more money, they deliver the services well. Payments must bring results, and that has to be the case at every level, including the GP level.
	I am concerned about the decision to stage the nurses' pay award. The independent nurses pay review body has done a fantastic job for nurses ever since it was set up many years ago. By considering the evidence from the unions, employers and Department of Health, it bases an award on the careful consideration of the facts. The review body came up with a 2.5 per cent. settlement. It was not generous, but it was fair. No matter how we dress it up, however, staging the award means that the pay award has been reduced by 0.6 per cent.—a cut that many nurses cannot afford if they are trying to get on the property ladder or raise a family. In the Department's response to the Select Committee's report, it says that staff costs are not a main reason for deficits. I cannot understand, therefore, why we are paring down the nurses award.
	I am particularly disappointed with the nurses' pay award, because nurses have been through a lot. Even though there have not been a large number of nurse redundancies in my patch, there has been a great deal of anxiety among nurses about getting local jobs.

Simon Burns: Let me start on a positive note by thanking the Minister for the tremendous work that he did over a considerable time at the back end of last year and early this year to help to ensure that Broomfield hospital private finance initiative scheme moved successfully to a positive conclusion. I am extremely grateful, as are my constituents, to him and to his right hon. Friend the Prime Minister for all the work that they did to help to achieve that.
	I say that because it is relevant to what I want to say about Mid Essex Hospital Services NHS Trust and Mid Essex—formerly Chelmsford—primary care trust, which are both in deficit with a turnaround team trying to sort them out. I should like to pick up some of the points in the Health Committee's report warning against short-term remedies to try to solve longer-term problems. Mid Essex PCT has a deficit of what was thought to be about £11 million but is in fact somewhat more than that, and Mid-Essex Hospital Services NHS Trust has a deficit of £13 million. They are both trying to meet the Government's requirements over the last financial year and for the forthcoming financial year and are having to take some tough decisions to break even and fit Department of Health requirements.
	The problem is that short-term decisions are being taken to reduce deficits. In the case of the PCT, for example, there is the closure of the only intermediate care wards at St. John's hospital, which were brought in by the Government five years ago with a special grant to help to overcome the problem of delayed discharges at Broomfield hospital. I suspect that in the coming months the closure of those two wards will have the knock-on effect of increasing the pressures and problems of delayed discharges, so it is a false economy.
	In both organisations, there have been redundancies, most of which have been voluntary or achieved through not replacing unfilled posts. Again, that has a knock-on effect in causing problems for existing staff who have to do extra work under extra pressure. On top of that, 50 nurses are being made compulsorily redundant. During questions before Christmas, the Minister gave the figure of 20 or 22 compulsory redundancies, but by the end of this financial year it will have increased to 50. Those are not long-term realistic views but short-term decisions to meet an immediate problem, and the adverse knock-on effect will not be helpful for the hospitals concerned.
	I should like to make a special plea on behalf of Broomfield hospital, which I visited last Friday. I went to see an ophthalmic surgeon who is extremely concerned about the Government's proposal to create three independent sector treatment centres in Essex—in Southend, Basildon and Braintree, about eight miles from Broomfield hospital. If that decision had been taken five or six years ago, when there was a particular problem with waiting times and waiting numbers in Mid Essex Hospital Services NHS Trust—the figures show that in the first four years of this Government, the trust faced an inexorable increase in the number of people waiting for treatment, although there may have been falling numbers elsewhere—it could have played a very positive role in helping to deal with the problems at the hospital by providing extra capacity. As its record shows, Broomfield hospital is meeting the key targets that the Government set. My fear, and that of many at Mid Essex Hospital Services NHS Trust, is that if, on top of the trust's deficit, about which it is taking tough decisions, an independent treatment centre goes ahead at Braintree, it will siphon off patients because it will undertake some of the work that Broomfield does. Although the price will be the same, there is a fear that patients will be siphoned off to the Braintree ITC. That has significant and serious implications for the funding streams and finances of Broomfield hospital.
	I therefore ask the Minister to consider what could be a serious problem and possibly think again, even at this late stage. He may not yet be aware that I faxed a letter to his private office at approximately 7 o'clock this morning. I hope that he will agree to meet me and the senior management of Mid Essex Hospital Services NHS Trust in the near future—because of the time scale—to discuss the matter.
	I should like briefly to consider another matter. Several people who gave evidence about recovery plans to the Select Committee, including Mr. Everett, the director of recovery at Kensington and Chelsea primary care trust, made the point that it was important to deal not only with capacity but improving clinical and administrative efficiency in running hospitals. Any sane person wants to remove excess bureaucracy. I am the first to admit that, given the size and scale of the work that the NHS does, one has to have a first-rate management team to ensure effectiveness and efficiency, but one has to guard against going beyond that to a bloated administrative system. Management teams should seek, in administering hospital procedures, to get an effective, cost-efficient system.
	In that context, I draw the Minister's attention to something that I discovered personally in the past week that appears to run contrary to the Select Committee's report on effectiveness and efficiency and the evidence that it was given. Most people would agree wholeheartedly with the concept of offering patients choice. My party has advocated it for some time, and we always welcome converts to the cause, so we are delighted that the Government have embraced the concept.
	However, before choose and book was introduced, there would be a consultation when patients visited their GPs, who determined the best way forward. If they could not treat the patients, they would recommend that the patients went to their local hospital to see the local consultant who was a specialist in the relevant condition. In my experience and that of my children in the past, one would usually get a letter in a week or so from the local hospital trust to say that one had been referred to Mr. Bloggs the consultant and to set a specific time on a certain date to see the consultant, who would then determine the required treatment and book one into the hospital for an operation or other treatment. That was an efficient, swift and sensible way to proceed.
	Under choose and book, the process is no longer sensible, efficient and cost effective. I do not know whether the system is unique to Mid Essex—if so, someone should explain to the trust that it is the wrong way to proceed when trying to be cost effective, efficient and to save money to plough more into patient treatment. Patients now go to their GPs, who identify a problem and say that they will refer them to a consultant. It is the first time that I have come across choose and book because I fortunately do not visit my doctor often. I was given a choice of five hospitals. I chose my hospital and off I went.
	Six days later, a letter arrived. It was not from the hospital that I had chosen but the GP's practice. It stated that, following my recent appointment, an assessment of the GP's decision to refer the patient to a consultant had to be conducted. If I passed the assessment and it was decided that I should see the consultant, I would have to wait seven days from receipt of the letter and ring a telephone number at the hospital trust to make an appointment to go to the hospital of my choice and see the consultant. It is odd that a committee—presumably—assesses and second-guesses whether the GP has made the right decision.
	The letter was four pages long and included some gobbledegook. By the by, it told me that the location that I had chosen was not the location that I chose. If we are trying to be more effective and efficient, why cannot we retain the tried and tested old system?

Stewart Jackson: It is appropriate to examine the financial and political context of our debate on NHS deficits. I concede that there has been a 7.5 per cent. real-terms increase in funding over the last 10 years under this Government. Indeed, the only promise that the Prime Minister has kept is that our spending on health is now at the European average. By the end of the financial year 2008, we are looking at spending £92.6 billion on health care. There have been some successes, as I say, with improvements in mortality rates in cancer, coronary heart disease and in-patient waiting times.
	There have also been significant areas of failure, however. Mental health services and stroke care have deteriorated and obesity has gone up by 500 per cent. since 1980. Last week, we were quizzing the Under-Secretary of State for Health on audiology services—a major area of failure by the Government, who have done nothing to alleviate the problem in the last 10 years.
	I believe that the Government have tested to destruction the idea that it is possible to transform the NHS by spending money—without fully costed, comprehensive reform of how the NHS works. The notion that increased funding was all that was needed certainly held sway under the calamitous stewardship of the right hon. Member for Holborn and St. Pancras (Frank Dobson) at the end of the 1990s. It was a theory completely without foundation. Between 1979 and 1997, real expenditure on the NHS went up by 74 per cent.; nurses' pay went up 79 per cent. between 1988 to 1995 when the economy grew by only 54 per cent.; and infant mortality in the first 12 months was more than halved between 1979 and 1997. As the hon. Member for Romsey (Sandra Gidley) said, the taxpayer is entitled to ask where all the money has gone.
	As we enter the period of the comprehensive spending review, one third of NHS organisations are in deficit—a gross deficit of £1.33 billion and a net deficit of £600 million. A wider question is why the NHS is not delivering more wide-ranging reforms and is doing so relatively badly by international comparisons. The most recent Organisation for Economic Co-operation and Development data—published last year—on mortality rates and potential years of lives lost that are a priori preventable shows that we rank 22nd out of 26 OECD countries and that we have fallen two places in the period between 1999 and 2003. In fact, the UK has seen no real improvement on mortality rates in respect of stroke care, for instance, and deaths from heart disease are significantly in excess of other OECD members—with the exception, I concede, of the United States.
	Where has all the money gone? The King's Fund found that in the financial year 2005-06, almost half the growth in spending had gone on higher pay for general practitioners and consultants. Indeed, the Secretary of State confirmed in her oral evidence that in the three years to 2005, GP salaries had gone up by 50 per cent. and hospital consultant salaries by 27 per cent.
	At the Select Committee hearings in November, the Secretary of State also conceded that administrative and clerical staff had risen by 72,695 posts since 1997 and that there are now 230,000 administrative and clerical staff employed in the NHS. As I mentioned earlier to the hon. Member for Romsey, Ministers are unable to tell us what contribution they are making to wider strategic plans in the NHS because they do not collect such data. We await with interest the Select Committee report on work force planning, which I am sure will be a smorgasbord of similarly disobliging data.
	The Select Committee learned that the total capital cost of 54 major PFI projects was more than £25 million—we are not talking about loose change here—and had risen by an average of 31 per cent. after the outline business case. No wonder nurses feel aggrieved about being forced to accept a derisory 1.9 per cent. pay rise to fund this incompetence on an epic scale. The working time directive, "Agenda for Change", GP consultant contracts have all contributed to significant cost pressures.

Stewart Jackson: I am merely saying that the Government's incompetence when it comes to executing "Agenda for Change" is awe-inspiring. A Conservative Government would not have gone about it in such a cack-handed and incompetent manner.
	We have seen no evidence of increased productivity over the last 10 years. The Government have preferred to focus on endless reorganisations, which have had little or no impact on patient care. Forty central NHS agencies have been created since 1997; and 400 or more performance targets mean a constant between balancing the books and meeting centralised targets. As we know, targets can be manipulated. In 2004, the Audit Commission cited evidence that in some trusts patients were removed from waiting lists once they had been provided with a future date for an appointment. They were given immediate appointments that they were not able to attend and then classed as refusing treatment or having treatment inappropriately suspended.
	Anyone who genuinely believes in real reform of the NHS would welcome the Government's moves in that direction over the next few years. Conservative Members agree with patient choice and plurality of providers. We believe that independent sector treatment centres are a good development as are payment by results and practice-based commissioning, but where is the commitment to support the development of care networks and integrated services and why the palpable failure to develop community hospitals, which was a manifesto commitment in May 2005?

Bob Spink: While my hon. Friend is discussing independent treatment centres, did he see the written answer that the Minister—in his place there on the Treasury Bench—gave me on Tuesday 6 March? It said:
	"Independent sector treatment centres (ISTCs) are paid contract prices, which reflect the outcome of a competitive tendering exercise conducted at national level. NHS trusts and foundation trusts continue to be paid for activity at the national tariff, which is based on national average costs reported by NHS organisations."—[ Official Report, 6 March 2007; Vol. 457, c. 1964W.]
	Does my hon. Friend agree that the ISTCs will get the less costly more straightforward cases to deal with—and deal with them very well, I am sure—leaving the NHS trusts with the more complex, more costly cases, yet without unit price increases to reflect that change? Is it not another disaster in the making for NHS funding?

Stewart Jackson: The Select Committee heard significant evidence from many people in the private and public sectors. There was a huge amount of anecdotal and empirical evidence pointing to an enormous amount of mismanagement, mainly at Government level through the Department, but also—I have to say, in fairness—at local level. The answer to my hon. Friend's question is an emphatic no.
	In their paper for the King's Fund, Appleby and Harrison found that the benefits of the extra funding would probably not outweigh the costs, if a traditional cost-benefit analysis were carried out. That is a damning finding. Unfortunately, that is the record of this Government.
	I would like to focus on three key areas arising from the Select Committee report: the funding formula and the link to deficits; resource accounting and budgeting, and the target culture; and the impact on patient care, training and development of the cuts resulting from trusts' deficits.
	The Chairman of the Select Committee said that the funding formula dated roughly from 2003. Justified concern has been expressed over the fairness and accuracy—or otherwise—of the formula, and particularly over its static nature and the lack of proper accounting relating to rurality and to multi-site hospitals, particularly in acute trusts. In regard to methodological failings, I would draw to the House's attention the comments of Professor Mervyn Stone of University college London, who described the methodology as being based on "questionable" statistical methods, no less. He highlighted the fact that the present formula is based on the current use of health services and indirect measures of health care need. North East London Strategic Health Authority made the point that the formula was
	"poorly evidenced and insensitive to local factors".
	The Department's chief economic adviser found only a
	"moderate correlation...between the needs and age index and deficits in health economies in 2004/2005",
	but it cannot be a coincidence that Professor Asthana told the Committee that there was a clear link between the level of growth in funding and deficits, with 34 out of 60 PCTs in deficit having received a smaller than average increase in funding. Only four receiving the biggest increases were in deficit.
	Age is also a factor. Witnesses appearing before the Committee made the point that the funding formula makes no weighting provision for areas with a high proportion of older adults, such as the south-east and the east of England—my area—where the burden of disease is naturally higher among older people. In fairness, I am pleased to acknowledge that the Department has promised, in its response, a thorough review of the funding formula, including the market forces factor, rurality, and practice-level formulae. We look forward to seeing the results of the research being undertaken by the advisory committee, but I hope that it will act with a degree of alacrity that has not been present hitherto.
	With respect to the resource accounting and budgeting system, I am disappointed that the Department is unwilling to offer assurances that the problem of double deficits caused by the RAB system, which has a direct impact on patient care, will be addressed. I hope that the Minister will be able to comment on that later, particularly as the Audit Commission and the Select Committee have found the RAB system to be an unsuitable and unsustainable accounting regime.
	The Secretary of State's pledge to bring the NHS into break-even or surplus by this month is built on assumptions that entail widespread underspends, recourse to contingency reserves and other smoke-and-mirrors accounting practices. I want to quote the Committee's finding in this respect:
	"Top-slicing is a temporary expedient, but it must not become a permanent part of NHS funding. We recommend that a time limit be set on its use...Continued top-slicing and the establishment of a contingency fund would be an admission by the Department that it accepted that individual trusts would remain in deficit".
	That is an important point.
	We also know that targets for emergency admissions, accident and emergency services and waiting times have had a huge impact and resulted in a huge commitment of scarce resources, without the commensurate improvement in patient care. Indeed, a Healthcare Commission patient survey in 2005 found that 32 per cent. of patients were admitted to A and E within an hour in 2005, compared with 43 per cent. in 2004. That was within the four-hour target, but the service had none the less been reduced.
	Deficits have clearly had a major impact and serious consequences, not least in the constituency of my hon. Friend the Member for Hemel Hempstead (Mike Penning) and those of other Members across Hertfordshire.

Stewart Jackson: I sympathise greatly with my hon. Friend. My own trust has seen a £7.7 million deficit resulting in the loss of 185 posts and many bed and ward closures. I commend to the House the sterling efforts of all the Members of Parliament representing the Hertfordshire constituencies on behalf of their constituents to fight the Government's wrong-headed plans.
	The impact of double deficits, of the European working time directive, of the agenda for change, of the mismanaged consultant and GP contracts, of the ongoing IT debacle and of the many other examples of poor central management is best summed up by the hon. Member for Stroud (Mr. Drew), who is not in his place at the moment. He has fought a brave battle against reductions in services in his Gloucestershire constituency. In his evidence to the Committee, he said:
	"The reality is that our area is having to unfairly carry the burden for the high levels of historic overspend...The result is that the SHA area is being asked to make savings amounting to a staggering 5.3 per cent. of turnover".
	Across the country, more than 17,000 posts have been lost, operations have been delayed with the imposition of minimum waiting targets in at least 43 per cent. of acute trusts, funding has been reduced for soft targets such as public health, mental health and sexual health, and there has been a freeze or real terms cut in training and development and staffing posts, as evidenced by the contribution of the hon. Member for Staffordshire, Moorlands (Charlotte Atkins). Sadly, the Government have made no commitment as to when cuts in training budgets will end; that is as we enter an era of potential health spending famine, not feast. The Government have failed to make use of unprecedented and generous spending on health to deliver real and long-lasting reform—which is the basis of better health outcomes—and to achieve the target of reaching European levels of health care. As the report makes abundantly clear, they have missed an historic opportunity to do so.

Richard Taylor: I feel that the gist of the Health Committee report was more critical than speeches so far have reflected. Not being a member of a major party, I can voice such criticisms more strongly, without being accused of political intent.
	My first criticism is of the form of the Government's response. On Sunday afternoon, I set about trying to make sense of it. I plead with the Minister to at least include some cross-referencing in his Department's next response, so that we can see what number recommendation and paragraph the Government response is addressing. It is incredibly difficult to do that without cross-referencing.
	I also make a plea for the Government response to be complete. There is no mention at all of several recommendations. Recommendations 3 and 4—the Minister will probably not know what they were, given the numbering system—refer to the underlying deficits and the large inherited deficits. I would like to have seen more about those in the response. A whole chunk is missing from recommendation 15 in its reprinted version in the response. The missing phrase is,
	"The requirement that a hospital trust pay back a deficit while operating on reduced income is inappropriate for a healthcare service and in some cases impossible to achieve."
	That strong point was agreed by the cross-party Committee. Many hon. Members have mentioned the double deficit, but the matter was not adequately addressed.
	I shall abbreviate many of my comments, because lots of points have already been made.
	In relation to education budgets, at least the Government have admitted the severity of the attack. They promise that the cuts will only be short-term. In paragraph 64 of their response, with regard to the transfer of the multi-professional education and training money to SHAs, the Government say:
	"This was done to allow SHAs greater flexibility to use resources to address local priorities including financial deficits."
	It is a real worry that financial deficits, rather than clinical need, have almost become the first driver, as many Members have said. I absolutely support the aim for financial balance, but the speed with which it is apparently being pursued will cause disadvantages in terms of clinical need.
	There are real worries about the funding formula. Our recommendation 25 states:
	"There is concern about the fairness of the funding formula. We do not consider ourselves qualified to judge whether these concerns are justified. We recommend that the formula be reviewed. Consideration should be given to basing the formula on actual need rather than proxies of need."
	In a recent article in the  British Medical Journal, headed "Time to face up to 'scandal' of funding formula: The government is in denial about the effects of funding inequities on primary care trust deficits", Nigel Hawkes writes that the Health Committee report
	"rather glossed over the effects of the funding formula".
	He also made a definite criticism:
	"A government dedicated to reducing health inequalities, and with most of its MPs elected from areas favoured by the formula, has brushed these criticisms aside."

Richard Taylor: That is why the inquiries instituted—one of which is supposed to report by autumn this year, and the tenders for the others are out—need to be completed as quickly as possible.
	On staff costs and reductions, it is not surprising that the Department does not agree with the Health Committee about the role that the underestimated costs of contracts played in the deficits. Obviously, it minimised the figures that other sources have emphasised. The Department has a marvellous way of deflecting criticism. Paragraph 57 of the Government's response states:
	"Each of the pay reforms addressed fundamental weaknesses in the previous pay contracts, including recruitment and retention problems, poor control over outputs provided by doctors and other staff, poor control over earnings growth, low productivity growth and significant exposure to equal pay risks. The fact that the contracts address these inherent weaknesses is evidence of good long-run financial management."
	The only way in which to reduce spending in an NHS that is very labour-intensive is obviously to reduce staff. Paragraph 61 of the Government's response states
	"As Trusts become more efficient, they can continue to provide high quality care with fewer staff. We know from individual Trusts and SHAs that reductions in posts are being managed in ways that minimise the needs for redundancies—for instance through recruitment freezes, natural wastage, and redeployment."
	That does not take account of the fact that, although the number of redundancies is not very great, because of those effective vacancy factor measures the reduction in staff numbers is really quite extensive.
	A  Health Service Journal survey of 100 chief executives, published a week or so ago, revealed that more than two thirds believed that patient care would suffer as a result of short-term financial decisions. My own trust has a freeze on about 10 per cent. of its staff, and it is hard to see how that will not affect the quality of care. It told the Health Committee, referring to staff cuts,
	"This will involve a comprehensive review of services across the three sites and serious questions about their sustainability."
	Important recommendations that have been rather brushed aside concern collective responsibility and value for money. In respect of collective responsibility, recommendation 22 speaks of the importance of including clinical staff, as spenders and as deciders of the way in which money is spent. The Government's response to that is rather thin. In respect of value for money, recommendation 21 mentions a very good Department of Health paper, "Better Care, Better Value Indicators"; but I wonder what the Department is doing about recommendations that could, if publicised, produce dramatic savings.
	Notwithstanding the Government's response, my overall view remains that the Department of Health is largely responsible for the deficits. Following its interviews with health service chief executives, the  Health Service Journal came up with some pretty strong quotations. One chief executive said of Ministers
	"they never once stopped to find out what it would cost to implement the latest good idea."
	Another spoke of
	"Blind panic as ever. No consistency of approach".
	I absolve this Minister, because I know that he was not around at the time. The chief executive went on
	"Bear in mind much of the financial challenges arise from centrally conceived pay schemes... which were ineptly designed and criminally costed by the Department of Health—despite warnings and advice from the service."
	I believe, and the Health Committee report emphasises, that the Department of Health must bear much of the blame for the state we are in.

Michael Penning: I congratulate Members on both sides of the House on their contributions to the debate on a report by a Committee of which I had the honour of being a member. In particular, I congratulate other members of the Committee.
	It was slightly disturbing to note that some Labour speakers had obviously not read the report. One Member, who is no longer present, asked "Where are these job losses?" Had he read the report he would have seen evidence given by Mr. David Law, chief executive of West Hertfordshire Hospitals NHS trust in my constituency. He admitted—although he did not want to do so, probably because he was worried for his staff and for his own position—that 750 jobs in the trust would go. The evidence is in the report, and it is a shame that Members should make such comments without reading it.
	On a lighter note, I can tell the House that Sir Humphrey is alive and kicking in the Department of Health, because he is clearly responsible for the Government's response to the report. I agree with my hon. Friend the Member for Wyre Forest (Dr. Taylor) that half the response is gobbledegook: anyone who can make sense of it must work in the Department of Health. It gives no cross-references, and does not refer to half the conclusions of the report. That too is a shame, because it is a very good report, and it is not a minority report. Members did not drop out, feeling that they could not put their names to it; everyone worked hard to establish a consensus that would help the NHS to make progress. The House has already heard about the quality of the evidence that we received, and the Minister is well aware of some of it. It is a pity that the Secretary of State is not present so that the Minister need not take the flak for her, as he often does. Certainly she would have had some flak from me had she been present, as she probably knows.
	Many of the comments that I was going to make have been made by other Members, but I want to say something about the funding formula. That will not surprise the Minister, because—over many years, to be fair—it has had a hugely adverse effect in my constituency, and on the future of the acute hospital trust there. That is why I was so proud of the chief executive when he gave evidence to the Committee.
	Some trusts are in such a difficult position that documents are being leaked to Members under threat. As I have said to the Minister before, it cannot be right that NHS staff are scared to blow the whistle on what is going on in the NHS. They are in the NHS because they care for their patients and for the community, and they should not have to worry about their jobs and look over their shoulders every five minutes. In the West Hertfordshire trust, notes are being issued telling all staff that it is a disciplinary offence to order temporary staff, or to order non-pay items.
	The fact that the PCT and the acute hospital trust in my constituency are in such a terrible state has a great deal to do with the funding formula. I raised the issue in the Select Committee when the Secretary of State was giving evidence, and I have raised it in the House, but I am not ashamed to raise it again. In my constituency, the acute trust and the PCT receive about £970 a year to look after the health care of my constituents. The Secretary of State's constituency receives roughly £400 a year more. I am not saying that every constituency in the country should receive exactly the same under the funding formula, because there are clearly areas of social deprivation, but the deficits in my constituency could be wiped out, not with £400—or £300, or £200—but with £100.
	Members have asked why the discrepancy is so great. The position is particularly bad in constituencies such as mine. My constituency was a new town: indeed, we still call it a new town, although it was built in the 1950s. At that time, a huge amount of the work force left north London and other London areas, and went to work in the new towns. There were hardly any members of the older generation in the towns, because very few retired people went there. Now all the working people have retired, and we have a huge pensioner population. It is fantastic news for my family and those of my constituents that people are living longer, but the burden on the NHS is phenomenal. The formula does not address that.
	The Secretary of State told the Committee many times, as the Minister has told us today—and I accept it entirely—that a huge amount of money has been invested in the NHS. That is taxpayers' money: not the Government's personal money, but revenue raised with promises that the NHS would improve. The state of my constituency, and other constituencies mentioned in the Committee's report, clearly shows that it has improved in some areas and worsened in others.
	When I asked the Secretary of State to explain why my acute trust was suffering so much in comparison with her constituency, she said "Your constituents are healthier than mine." I raised that in a debate the other day. I had much less time to speak in it—I was restricted to six minutes—than I do today, so I have a little longer to elaborate. The Secretary of State said, "Your constituents are healthier than mine; that's why I get £400 a year more than you do." However, we are talking about an acute trust with an accident and emergency department, a cardiac unit, a stroke unit, and until recently a brand new birthing unit, which is now being used as offices because we cannot pay for any midwives to staff it. The Secretary of State completely misses the point.
	What will happen to those who are in most desperate need? One of the most dangerous parts of the M1 runs through my constituency—it is to be hoped that the road-widening project will reduce the number of fatalities. All the people who are involved in road crashes and other road traffic accidents on that stretch of the M1 come to Hemel Hempstead's accident and emergency department, which is now to close. It will therefore be necessary for every single one of them to be driven past my hospital—if anything is left of it—and to be taken to Watford up the A41, which will cause huge delays. I am afraid that people will die. There is no argument about that—all the experts agree that will happen. That is why local GPs in my area have sent a letter of no confidence in the Government's proposals.

Michael Penning: My hon. Friend makes a good point. Evidence to our inquiry brought to light the fact that my constituency is in an interesting situation because not only does it have a very large pensioner and retired population, but it also has two of the most deprived estates in south-east England. Therefore, it meets the funding criteria in terms of both age and deprivation, so, in theory, we should benefit as a result, but we do not.
	The Government's decision to spearhead—to borrow the terminology that is used—money into areas of social deprivation has not been addressed much in our debate. I could not find any reference in the Government response to how those amounts of money are calculated. Their response suggests why that happens, and I understand it—although I do not agree. How is each individual pound calculated in respect of the money that goes into those spearhead areas? It is worth noting that there are few spearhead areas in the south-east where most of the deficits occur, which is a surprise.
	The hon. Member for Staffordshire, Moorlands (Charlotte Atkins), who is no longer present, said that when the financial crisis in her area was exposed, the board concerned resigned en bloc. I wish that that was the case in my constituency, because perhaps we would then get to the bottom of why we have such a bad management structure in my area, and why we are in our current position. I say that because, although I am critical of the Government on account of the deficits that have been caused by the funding formula, there has also been acute bad management, as the report highlights. We cannot just blame local management: the Secretary of State is responsible for appointments—for signing off the appointments of chairs and chief executives of all health trusts in this country. That is her responsibility. I intend shortly to ask how on earth the Government failed to notice some of the problems that arose.
	It is true that the Government ploughed huge amounts of money in, but they set narrow targets in terms of how the money could be spent. That was highlighted in detail in evidence to the Committee. What clearly happened is that the targets were set—"You must reduce this, or else"—and the money was spent willy-nilly. As has been said, no other organisation would be allowed to get away with that. No other organisation would be allowed to have an open cheque book and to spend money, and just carry on spending it—taxpayers' money—in that manner. I am particularly concerned about something that is not mentioned in the report: not only did the strategic health authorities not realise what was going on, nor did the Department of Health and its Ministers. On this occasion, I am not blaming the Minister, he will be pleased to know, because he was not around when most of that was going on, but the Secretary of State and some of the other current Ministers most certainly were.
	There have been huge increases in taxpayers' expenditure on the NHS. The relevant sum is £100 billion—we have almost reached that amount this year. How on earth have we got into what is probably the biggest financial crisis since the NHS was established? In evidence, the Government were continually dismissive. The problem is not that bad, they said. I think that the phrase that the Secretary of State used was that it was merely a pebble in the pool. "This is just a tiny ripple of a problem," they said, but every Committee member agreed that it was not a tiny problem, but a huge one.
	It is a problem that has arisen for lots of different reasons, not least inept financial management throughout the NHS, including right at the very top. How can one day the head economist of the Department of Health say in evidence that the funding formula is a major contributor to the deficits, and, at the following evidence session, the Secretary of State say, "No, it's not"? When I pointed out to the Secretary of State that her own economist had given evidence to the contrary to the Committee, she fobbed us off. Evidence to support my point is in the report.  [Interruption.] Is the Minister agreeing with me from a sedentary position? If he is, he should have addressed that issue in the Government's response to the report.
	The report is important, and the Government response does not do it justice. If Sir Humphrey is still wandering the corridors of the Department of Health when the current Conservative leadership is elected to government, he will get the bullet.

Phil Willis: I am not a Health Committee member, but I was particularly interested in the report and I congratulate the right hon. Member for Rother Valley (Mr. Barron) not only on introducing an exceptionally interesting report, but also on engaging a wide range of opinions on it and the Government response. That is highly commendable.
	I am glad that the hon. Member for West Chelmsford (Mr. Burns) has returned to his seat. It was interesting to listen to a Conservative party member talking about his opposition to plurality of providers within the NHS, because I thought that that was standard policy. To have treatment centres offering different approaches seems to me to be absolutely right.

Phil Willis: I am delighted that I have been able to give the hon. Gentleman an opportunity to clarify that. We now know that we can have plurality, provided that providers are not too near to other providers. That is a clear position for the Conservative party to adopt.
	Let me tell the Minister and the right hon. Member for Rother Valley, who is no longer in his place, that I agree—indeed, my hon. Friend the Member for Romsey (Sandra Gidley) made it clear that the Liberal Democrats agree on this as a party—with the general principles that the Government are trying to follow with their health service reforms, in that what matters is the treatment that individual patients receive. We are all trying to reach the same point. When the NHS was founded, its purpose was to treat individuals according to their clinical needs. We are strongly in favour of that. There might be different journeys on the way to that point, but I would like to think that the whole House would coalesce around that specific objective.
	The real issue is that we cannot allow primary care trusts, individual hospital trusts or any other trusts that provide care to be told that they must control their budgets and manage within them, but then to be given directions from the centre, over which they have no control, that impact on their budget decisions. Government targets and new initiatives have already been mentioned in that regard. Local PCTs have absolutely no control over initiatives that come from the Department, but they have to treat them as priorities. In many cases, that will distort their budgets.
	PCTs have also changed. In the almost 10 years that I have been an MP, there have been four changes to the organisation of PCTs and their predecessor bodies. That does not give the necessary firm foundation on which to take long-term decisions about health care needs within a particular area. All those decisions have had an impact on the budgets that were to be given to front-line providers, yet they had no control over those decisions.
	The latest decision to affect North Yorkshire and York is the huge reorganisation of PCTs that has left our area with the largest deficits of any PCT in the country. In Harrogate and Knaresborough, the PCT and the hospital were in balance, but they had a 2.5 per cent. budget cut, through top-slicing, and we have had to pick up the huge problems from the Selby and York—the hon. Member for City of York (Hugh Bayley), who is in the Chamber, will know about that—and Scarborough PCTs. It is wholly wrong to tell my local hospital trust that it has to pay the penalty for mismanagement elsewhere or for centrally driven targets and initiatives. The Government cannot have it both ways—but that is the effect of their argument.
	Like most areas, ours has received significant rises in health budgets. Conservative Members have admitted that getting to the European average was a significant Government initiative. I congratulate the Minister and his colleagues on that. This year, North Yorkshire and York has received a 9.5 per cent. increase in budget, which is £69 million extra, but we have had to address a £43 million deficit. Last week the PCT told us that it had made significant inroads into that deficit, which is now only £35 million. However, those reductions include a reduction in the money available for redundancies, which is purely a paper transaction, and in other transactions and capital costs. The reality is that constituents across my patch face significant cuts to services.
	The trust at Harrogate district hospital is not only a three-star trust, but is the highest-performing trust in the country. That is down to the work of its brilliant chief executive and good clinical staff, but it now has to cut back on treatments. What is the effect of that? Something that has not been mentioned much today is the effect that such changes have on people. The hon. Member for West Chelmsford—I hope that he does not shout at me again—rightly mentioned choose and book, and the complications that came with it, particularly with the intervention of an assessment panel; I do not know what the correct terminology is, but I shall call it an assessment panel. I hope that the Minister will sort out that interface between GPs, consultants and the PCT. I believe that he is committed to resolving these problems,
	The problem is not just about money; it is the imposition of organisation from the top. I shall give hon. Members a few examples, the first of which is an excerpt from a GP's submission to what is known in our area as the exceptions panel—an interesting name—about a lady in my constituency who has significant bilateral knee pain. He wrote:
	"Clinically I suspect she has a cartilage tear. I referred her to Orthopaedics on the 27th of December 2006 and received a reply from the referral and clinical advice service dated the 10th of January, suggesting that I refer her for MRI imaging, rather than an immediate orthopaedic referral."
	He goes on to say that after discussing the matter with the patient, he did as he was asked, only to get a letter back refusing the MRI request because he now, apparently, needs prior approval from the PCT's referral panel. That is absolute nonsense. That GP has made a clear clinical assessment—the very purpose of the NHS—and someone else is second-guessing that assessment.
	I particularly want to discuss the case of a three-year-old boy in my constituency called Elliot Isaacs. I suspect that many right hon. and hon. Members will have similar cases in their constituencies. Elliot has major hearing problems. After a long fight, he was fitted with grommets in both ears last summer. That made a huge difference to him, and he suddenly began to communicate more effectively. His speech improved, and obviously his hearing had improved significantly. He was making substantial progress—until the grommets came out in October because of a related illness. That is quite common; it certainly is not unusual. He is now being refused—not by his consultant or GP, but by the faceless interface between the GP and consultants—the opportunity to have grommets refitted and to be able to hear again and develop.
	All hon. Members who have young children know that those early years are the most critical age for the development of language and everything else that goes with it, but that decision was made by that impersonal interface. The irony of it is that Harrogate hospital, which carried out the first operation, performs grommet operations on a daily basis for patients from Leeds, because the PCT there has the money to send its patients to Harrogate to have those operations. If that is a local care system responding to the needs of local people, I am a Conservative—or a Dutchman, or whatever.
	That is the principal issue to which I would like the Minister to respond. His response to the Select Committee report does not address some of its core recommendations. There has to be a two-way street between organisation and local autonomy. Yes, financial prudence and good financial management are necessary, but so is independent decision making, and local trusts must have the right to make those decisions.

Andy Burnham: I want to make some progress, so I will not give way. We are 19 days away from the end of what I accept, and what everyone in the Department would acknowledge, has been a difficult year for the national health service. Painful decisions have been made, but it is clear to us that the NHS will be stronger as a result. The NHS has grasped the nettle on overspending, which has been tolerated for far too long. Despite that, and despite us having brought more rigour to the health service's financial system, key financial objectives will be met this year, and I will mention those in a moment. Key service standards will not be jeopardised, and as a result of the action taken, the NHS is in a much firmer position for the next financial year. It is building on a much stronger platform as a result of the changes made.
	Let me remind the House of the three clear objectives that my right hon. Friend the Secretary of State set for the national health service this year. The first is to deliver a net financial balance across the NHS as a whole by 31 March 2007, the second is to ensure an improvement in the financial performance of all organisations that reported a deficit in 2005-06, and the third is to achieve recurrent monthly run rate balances across as many organisations as possible by the end of the financial year. As we reported in our third quarterly report on NHS finances, the NHS has made considerable progress in delivering against each of our key financial objectives, and it remains firmly on course to end the year in net financial balance. In fact, taking account of the £450 million in savings that strategic health authorities have identified, overall, the NHS forecasts a year-end surplus of £13 million at the end of the third quarter of the year.
	On the in-year position for this financial year, when the impact of deductions for prior overspending is ignored, the NHS forecasts an in-year surplus of some £269 million. That is a remarkable achievement, and it bears witness to the hard work of NHS staff across the country who have sought to deliver savings, increase the efficiency of working practices, and reduce deficits.

Andy Burnham: What makes sense for the NHS as a whole is to ensure that it does not have loose priorities. The hon. Member for Harrogate and Knaresborough (Mr. Willis), for whom I have great respect, said that we should aim to achieve a financial balance, but that it should not be the be all and end all. However, it is crucial for the future stability of the NHS that in the system, there is rigour and discipline that perhaps have not been evident in the past.

Andy Burnham: I should like to make progress, because there are some serious issues that my right hon. Friend the Member for Rother Valley and others have raised. I have accepted a number of interventions, and I wish to deal with education and training.
	My right hon. Friend the Member for Rother Valley asked what the service level agreement between strategic health authorities and the Department means. We believe that is right that at SHA level there should be flexibility to manage the future work force needs in any region, and that is precisely what the service level agreement will require. In making decisions about centrally allocated budgets, provision must be made to plan for the medium and long-term work force needs of that particular area. The hon. Member for South Cambridgeshire asked me whether I could confirm that there would not be any take from the 2007-08 education and training budget. I turn the question back on him: how will he square an independent NHS, where all supposed interference will allegedly disappear, with his plans to take all the decisions out of the hands of politicians? We will put decisions in the hands of the strategic health authority, but we will require it to plan for the medium and long term.
	My right hon. Friend the Member for Rother Valley asked about vulnerable services. He is right that in the past, the casualty of NHS budgeting was more vulnerable services such as mental health— [Interruption.]—or learning disability services, as my the Minister of State, Department of Health, my right hon. Friend the Member for Doncaster, Central (Ms Winterton) says. It is precisely because of the transparency of the regime that such a situation will not be tolerated in future. It will not be possible for the budgets for services to some of the most vulnerable people in our society could be raided to backfill deficits elsewhere. That is another virtue of the—

Andy Burnham: The hon. Gentleman should read the letter that his hon. Friend the Member for South Cambridgeshire sent me, in which he said that the Conservative position is to allocate resources in the health service according to "burden of disease". A key driver would therefore be age. The hon. Member for Beverley and Holderness (Mr. Stuart) has just accepted that age is a proxy of need, not a real driver of need. On several occasions, I have put it to the hon. Member for South Cambridgeshire that, there are much clearer measures of the burden of disease in the NHS, such as those that I listed at the beginning of the debate, including the mortality rate per 100,000 of the population under 75 from cancer, coronary heart disease and stroke, and the prevalence of diabetes in under-75s throughout the population. Those are measures of the burden of disease.  [ Interruption. ]

Kevin Barron: With the leave of the House, I thank Members in all parts of the House who have taken part in the debate, particularly the five members of the Health Committee—or rather, four members. The hon. Member for Peterborough (Mr. Jackson) was not with us when we agreed the report on the national health service deficits. Their work over the weeks and months has contributed to today's debate. Although it got rather noisy towards the end, as debates tend to do, it was a welcome attempt to explain what has happened in the funding of the national health service and why, over the past 18 months, the overspend has been greater than in the preceding 50 years. The transparency of the examination of NHS expenditure has highlighted that.
	I told the hon. Member for South Cambridgeshire (Mr. Lansley) that the criticism of the report explaining the NHS deficit was not fair. The document is available on the web and the six points by the Government's main adviser in the executive summary are worth reading. It goes much further than the Health Committee did in examining the current deficit, as it was written by people inside the institution who have access to more information and more time than we had.
	The document highlights problems in many areas, such as productivity issues. Because there is extra money coming into the system, more people can carry on with what they are doing, as opposed to being asked to get more out of the available funding or to achieve better outputs from increased funding. Anybody who is interested in NHS deficits should read it.
	In their response, the Government take into account some of the blindingly obvious problems that we identified in the NHS. I hope the service level agreement in relation to education and training will be published, so that everyone, including strategic health authorities, understands what is expected. I should warn my hon. Friend the Minister that later this week we hope to agree a report on work force planning, so we may return to several of the matters that were covered in the debate.
	My hon. Friend said that it was likely that third quarter publications would not reveal the overspend predicted at the beginning of the financial year, and consequently that there would be some moneys in the system that are not needed to match the overspend. I, together with other members of the Committee and other Members of the House, will be watching carefully what happens to that money between now, the end of the financial year and the beginning of the next financial year.
	I am pleased to hear my hon. Friend say that he does not expect the top-slicing exercise to be as large as it has been in this financial year. I hope not. In my constituency top-slicing has not taken up the growth money that was put into the system, so it has not hurt services at this stage. The reason for budgets of the level that we get in south Yorkshire is the health inequalities that we face, so it is important that that is recognised.
	I welcome the Government's attitude to the funding formula. In autumn this year we should find out whether rurality a big issue and whether it should be addressed. I look forward to a debate on estimates that covers the wider issues of our work as a Committee and the work of the national health service.
	 Question deferred until Ten o'clock, pursuant to Standing Order No. 54(4) (Consideration of estimates &c.).

Gwyneth Dunwoody: The best kind of partnerships, whether they are social, sexual, economic or political, are those in which people talk to one another, and occasionally listen to the response. Considering how many millions of people there are in the world, these partnerships are not easily found, and not usually in politics. My Committee felt that it was time that we looked carefully at the partnership that exists between the two groups of people who have to develop and deliver transport policy.
	It is important to say at the outset that the Government are one of the first for a very long time who have committed themselves to developing a transport policy. They have put large sums of money into various aspects of transport. If I am not always pleased with the result, that is because, unlike the pope, my Government do not seem to be infallible. When one looks at the work of our Committee, it is essential to understand what we are saying. Governments can set transport strategies, and indeed they do. Governments can provide the budgets, and indeed they do. What Governments cannot do is deliver. The people who deliver the local transport plans are, by definition, local. It is not exactly a difficult thing to understand, but it is crucial.
	Our Committee decided to look at the way that the local transport plan framework had been introduced, and we decided that it was an improvement on the former system. We said that it had achieved quite a lot. However, because local authorities have to deliver many of the targets, it is essential to examine the performance. It does not matter how good the intention—where is the performance?
	We decided that there is always a particular tension between central and local government. The Department for Transport looks to local authorities to implement improvements but—let us be straightforward about this—it does not have a hands-off attitude. It sets the national priorities, it reviews and it scores, because that is the modern way of government. We all have to have our report cards, Mr. Deputy Speaker, even you or I. The Department awards capital funding for the integrated transport bloc and it decides on the balance between capital and revenue funding. It then decides which major transport schemes will be funded by central Government.
	None of this is reprehensible or difficult to understand. The problem arises when, for one reason or another, that partnership begins to get slightly out of kilter. One could say that with that set of objectives, no local transport plan is, in effect, local. It is centrally decided and locally implemented, but the strategy, the money and the determination come from the Department for Transport.

Gwyneth Dunwoody: We can all play the constituency game and say, "I haven't got everything I want on my particular wish list." A previous Government got their transport policies into one great mess because they promised everybody that they would get everything on their wish list and then ensured that there was never any money to achieve it. I am not going to play that game. I happen to think that we should be looking seriously at the problems that local authorities face to see how we can help to sort them out.
	The Committee said that it was unacceptable that local authorities were penalised for pursuing regeneration and job creation schemes. We stated:
	"The Department should make it clear local authorities can prioritise specific local transport needs, such as economic regeneration, and then give them proper weight".
	How did performance against local priorities influence the local transport capital settlement for 2007-08? Will the Government confirm that local authorities will be rewarded in their local transport planning scores for performing well against local objectives of regeneration and job creation? When it comes to comparing performance between various authorities, as every authority has some differences from its next-door neighbours, can we know exactly what local transport needs, targets and objectives the Department is using in allocating funding according to performance against local targets? Those things will make an enormous difference.
	We said that the Minister had told us that the
	"second round guidance was less prescriptive than the first".
	However, after the Government response was published, the roads performance division within the Department wrote to 10 urban areas covered by the urban congestion target and said that if they wanted to submit "congestion delivery plans"—this Government are so clunky in the titles they choose that one would think they were Liberals—they could then have them assessed and payments would be awarded from a £60 million congestion performance fund over four years. Do these congestion delivery plans required of the 10 largest urban areas add another layer of planning and assessment, or are they a completely new approach? It would be helpful if we were told.
	We looked carefully at capital funding and said that although the Department had told us it agreed with
	"the principle of applying proportionality in the assessment of scheme bids",
	we were not at all clear what proposals were going to be implemented to make that a reality. There must be some, and it would be helpful if they were stated transparently and clearly.
	We considered the whole question of bidding. It is time to understand that a lot of the processes not only cost a great deal in terms of a local authority's time, but they also cost money. If we assess the amount of work that goes into bids, it is clear that unsuccessful bidders, as well as successful bidders, are spending a considerable amount. Is the Minister going to tell us that the Department has got a target to reduce bidding time and costs?
	The Government also said that they were going to give final guidance on major scheme funding, including sharing scheme development costs, in early 2007. When will that appear? Please can we have an idea of what it will say about streamlining the bidding process and reducing the costs for local authorities? We have had enough bidding processes for us to make those assessments. Surely it is time that local councils were given the right support at the right time to enable them to make sensible decisions on whether they should continue with a bid if it is painfully clear—we were told this again and again in evidence—that, for one reason or another, the bid from a particular authority for a scheme that it regards as important is not going to be successful. Someone should tell local authorities at a reasonably early stage why a bid will be unsuccessful and on what basis that decision has been made. They should be told to begin to rethink their plans and not be allowed to continue at considerable expense and with considerable difficulty.
	I come to our old friend, the private finance initiative. The Committee said that if PFIs are not appropriate for transport, the Department should consider making the funding available through other forms of procurement. Sometimes there is a commitment—almost an ideological commitment—to the idea that only by using private finance schemes can Government policies become a reality. Frankly, not only is that totally difficult to understand, but in transport matters it is transparently untrue. Most of the PFI schemes that are operating—whether in railways or other forms of transport—have not produced the results and are making a lot of money for a lot of people without a lot of effective results.
	The Committee looked at the Department's decision to introduce a transport innovation fund, which will override the four shared priorities agreed between central Government and local authorities. The response did not give us any clear justification for that decision. Perhaps the Minister would like to explain how the national objectives in terms of congestion and productivity will be included in the transport innovation fund.
	I have no intention of taking time that should go to other Back Benchers, but it is important to say one or two things. We know that the Government are striving not to break their fiscal rules, but because of that local authorities frequently face the difficult conundrum of how they should balance their finances between revenue and capital, and how they are going to sustain the new transport schemes that many of them are introducing.
	As the example has been set, I want to refer to what is happening in the bus scheme in Cheshire. It is an excellent scheme. It has great support and my constituents are highly delighted with it, but the counties have not received support for administering that highly complex and rather difficult scheme. Given the constraints of Gershon and the other problems that have been put on local authorities, it is clear that there is a cost in administering the scheme which has not been allowed for or even properly planned for. Indeed, the differences between one area and another mean that some local authorities receive rather more financially than they had expected and some receive rather less. Local councils have found it almost impossible to pool those resources and to work together, which has put an even greater strain on the services. That cannot go on year after year. If costs are constantly taken out of local authority finances, those costs will become plain and will not only produce a shortage of revenue, but hinder the use of prudential borrowing by local authorities because they cannot service the debt.
	The Transport Committee felt that not only had the Government got an excellent set of priorities, but they wanted to deliver those services where such services count most. What therefore upset us was that we felt that the guidance did not contain sufficient transparency, clarity or even evidence of exactly what the Government wanted local authorities to achieve. Yet again, I return to the point that it is a partnership between the Government and local authorities. Maybe that partnership is uneven—it may be like the partnerships that one finds in medicine and legal affairs, where the senior partner gets the money and the junior partner does the work—but at some point it is nevertheless essential that the Government make their plans crystal clear. We cannot expect locally elected councillors not only to undertake responsibility for planning complex schemes and prioritising their interests, but to take the blame when the money is not available for schemes that have been promised. It is essential that the Government back up their extremely good intentions with a little more clarity and, dare I say it, a little more plain speaking. Ministers can do it, and it is about time that they got into the habit.

Alistair Carmichael: I commend that general approach. The Department for Communities and Local Government is a relatively young Department, but there is greater scope for some joined-up thinking and joint working between it and the Department for Transport. The social consequences, never mind the economic, congestion and environmental consequences, of not putting in the transport first and letting the other developments follow are obvious for all to see. If we have learned nothing else since the 1960s, when that approach was specifically disavowed, we should at least have learned that much.
	As the hon. Member for Crewe and Nantwich said, this should really be a Back Benchers' debate, but I want briefly to touch on the following areas: first, the departmental guidance on the preparation of local transport plans; secondly, the operation of the transport innovation fund; and thirdly, the strengthening of passenger transport authorities and passenger transport executives.
	There could not be a more unambiguous statement of the situation that local authorities face than paragraph 31 of the report:
	"If Local Transport Plans are to adequately reflect local objectives, the guidance and the scoring methodology must be rewritten to support it, and the way local and national priorities are weighted should be available to councils. It is unacceptable that local authorities are effectively penalised for pursuing regeneration and job creation schemes. The Department's Local Transport Plan assessment should make it clear that local authorities can prioritise specific local transport needs, such as economic regeneration, and that those priorities will be given proper weight. That said, it is incumbent on local authorities that wish to emphasise local transport priorities to be bolder in pursuing their objectives."
	I have always been of the view that transport exists as a service to underpin and reinforce Government policy in other areas. Social inclusion is one of the greatest opportunities, particularly when it involves a bus service, and economic regeneration and economic development is another. That relates to the point made by the hon. Member for Castle Point (Bob Spink) a few minutes ago. The inability to integrate transport planning into other policy areas is one of the biggest failings, and it is one of the biggest frustrations for many people in local government today.
	The final point in paragraph 31—
	"it is incumbent on local authorities that wish to emphasise local transport priorities to be bolder in pursuing their objectives"—
	is absolutely true, but we must recognise that such failures often stem from the almost siege mentality that now exists in many local authorities as a result of the constant battering at the hands of central Government.
	Turning to the measurement of local transport plans, the Committee should be commended for its work in that area. Paragraph 36 states:
	"It is wrong that local authorities are measured against targets over which they have no direct control, such as bus satisfaction or passenger numbers. Either local authorities need direct control over these services; or they should not be held responsible for them."
	That is an irrefutable conclusion. I am delighted that this something of a work in progress, now that we have the Government's White Paper on reforming bus regulation. If what is produced at the end of the process strengthens local provision, and in particular local accountability, I would certainly be prepared to support it.
	On bus regulation, the Committee's comments at paragraph 177 on the strengthening of the powers of passenger transport authorities are particularly pertinent in relation to the metropolitan areas, because those are the areas where there has been the greatest failure in the deregulated bus market, and it has ceased to operate effectively. Allowing for more powers and meaningful resourcing of passenger transport executives and passenger transport authorities must lie at the heart of developing the Government's bus policy. The deregulated system has worked well in some places—I think of Brighton, Harrogate, York and Cambridge—but that is because they are towns and cities of a certain size that have the critical mass of population to be able to make the integration of partnership working effective. In areas such as Greater Manchester, for example, it is pretty clear that that has not been the case. I should place on record my appreciation of the work of the Greater Manchester PTA, which is among the most effective of the authorities with which I have come into contact since I took on this brief. Particular credit goes to the Labour chairman, who has been assiduous in bringing the concerns of his organisation to Government.
	On the transport innovation fund, I agree with the hon. Member for Crewe and Nantwich that we can all welcome the significant injection of funds that it represents. However, in paragraph 116 the Committee makes pertinent comments about the way in which the transport innovation fund threatens the very concept of local transport planning:
	"The Transport Innovation Fund is not in any way about local choice or local schemes but about central government transferring its risk to local councils for what are schemes of national importance. It is not about innovation; it is about central control."
	I fear that the transport innovation fund might eventually defeat the Government's own policy, particularly on congestion. A patchwork of pilot schemes designed to tackle congestion might be difficult to bring together thereafter and to marry into one national scheme. I think that pilot schemes are emerging because that is the only show in town as regards local authorities getting money for transport innovation. We might be left with a series of areas where action to tackle congestion proves to be unpopular because it is seen as being an extra charge. That could put at risk instead of encourage the creation of a national scheme, which everybody who is serious about tackling congestion should accept.
	The House will soon consider the national concessionary bus travel scheme, which has already been dealt with in the other place. I am keen that we should all be able to unite around that scheme, which my party, in co-operation with the Labour party in Scotland, has been able to implement and to promote. My concern about the way in which it has been handled in the other place so far is that we risk taking an idea that everyone supports and implementing it in such a way that it will end up offending most people. Trying to fund a scheme as a bolt-on to the local government settlement is setting it up to fail.
	Hon. Members will be aware that the basis on which local authorities are given their financial settlement every year is byzantine to the point of being opaque, and has little to do with bus ridership in their areas. Significant numbers of local authority areas will struggle to finance the scheme because the funding has been given in such a way. I hope that when the Bill comes before the House the Government will look again at how the scheme will be funded and that they will take seriously the opportunities presented by a nationwide smartcard scheme, for example. That would be the best way of relating the money that goes to councils for the provision of services to their actual use. Failure to do that will mean that a significant number of areas, particularly in coastal and resort towns, will suffer, which surely cannot be an outcome that the Government intend.

Graham Stringer: I thank my hon. Friend for that intervention. Traffic commissioners are badly underfunded. If they had more resources, there is no doubt that their impact, even on a deregulated system, would be positive. I hope that in response to my hon. Friend the Member for Pudsey (Mr. Truswell) I was making the different point that however good they are at examining the current system, they are unelected. There are also other hurdles in the White Paper that might be difficult to overcome.
	There is a completely different system in London. The balance of funding between the rest of England and London has changed from roughly 50:50 to 60:40 in London's favour. That has been done without being explicitly stated, and I would be grateful if the Under-Secretary of State for Transport, my hon. Friend the Member for Lincoln (Gillian Merron) could justify it. When we ask the Secretary of State, the reply is always that London is different. London is no more different now than it was 10 or 15 years ago. It is special, as are many cities in this country.
	My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) has already referred to other contradictions. Three sets of priorities sit on top of local schemes. There is the interference—as I would characterise it—of the regional transport plans, which are sorted out in a vacuum by people who are not directly elected. There are the local schemes, with priorities that have been agreed between the Government and the Local Government Association. Those for local transport schemes are congestion, access to public transport, safety and reduction of pollution.
	I believe that every local authority representative who has come before the Select Committee and been asked the question, in this inquiry and in others, has always said that they wanted regeneration to be a priority. Clearly, there are conflicts between the set priorities and what most councils—particularly those representing deprived areas—want, which is to regenerate their areas, create jobs and bring wealth and prosperity to the people whom they represent.
	On top of that is the transport innovation fund system. As the report says, it is a centralising system with two priorities, one of which is to relieve congestion and the other is to improve economic performance. Those are all central controls and they contradict each other. Last Tuesday, when I asked the Under-Secretary of State for Transport, my hon. Friend the Member for Lincoln to explain what a TIF bid meant for Greater Manchester, I was, in a sense, not surprised when, as I went through aspects such as the regulation of buses, tram system funding and control over trains, she said that it was "quite a shopping list". It is exactly the same sort of control that obtains in London, but at the end of her reply on 6 March last week, the Minister said that "local solutions" were "the right way forward". I agree, but when central Government is effectively imposing on people an extra tax of potentially more than £2,000 in real terms, we need to know what the public offer is.
	Is it or is it not the Government's intention under the TIF proposals to fund the whole of the Metrolink scheme, as approved in 2000? When we asked these questions, and in response to our report, the Select Committee was told—I refer hon. Members particularly to point 22 in the response—to see the Government's consultation document on light rail and its improvement. Of course, when the Government recommend something like that, I immediately respond and look at it.
	Given that Ministers have regularly said that they are committed to light rail schemes, will the Under-Secretary explain why that document was a year late? Since April 2005, and in our report on light rail, we asked what excuse there was for that document to be a year late. How many officials were reprimanded? Was it a change of Government policy? Are Ministers going to tell us why the report was a year late? Is it because they have no commitment to Metrolink? I would like to know. One Minister asked me why I thought officials in the Department for Transport were against light rail, so this is one of the reasons.
	When I read the report—I advise my colleagues on the Select Committee to read it—I found that it was written in such a biased and unfair way that its clear objective could be only to damage light rail, not to respond to the needs of local people. The report carries on by saying that light rail is not always the best alternative. Of course not; sometimes buses are the right alternative, but in many cases light rail is. Does the report say what the benefits are? No, it is completely silent about them. It does not explain that the only real example of "modal shift" as the experts call it—people leaving their cars at home and using public transport—is Metrolink, which has an impressive record on regeneration and air quality. There is no response in the report on capacity issues, either.
	If we really want to get more people to use public transport, we need to provide the capacity. Sufficient evidence has been given to the Government and to the Select Committee that, even if we took all the cars off the roads in areas such as the west midlands and Greater Manchester, there would not be the capacity for people to change to public transport. We would have to increase that capacity and, in the case of Greater Manchester, that would best be achieved by using Metrolink. Why is that not mentioned in the report? I look forward to hearing the Minister's reply, but I can only draw the conclusion that officials and Ministers are anti-Metrolink. That is why I want to know whether the Government are going to fund Metrolink if congestion charging is brought in. Why is the contribution to Metrolink and the tram system 25 per cent. at the start and not 10 per cent., as for other major schemes? That shows bias against the systems.
	Possibly the most worrying statement in the consultation document is that there is apparently a problem with giving state aid to tram systems. This appears in paragraph 7.45 of the document. It is unexplained, and no distinction is drawn anywhere in the report between new tram systems and existing ones that might be extended. I understand the statement to mean that the Government envisage a legal obstacle to investing in trams because it would create unfair subsidised competition with buses. If that is the case, the report should have taken more than two sentences to explain it. I would be grateful if my hon. Friend the Minister would explain whether there is a European competitive hurdle to be overcome before we can reinvest in trams. Has the position changed in the past few years? Several tram systems have been brought on track recently, including those in Nottingham, Manchester, Sheffield and the west midlands. Has something changed, or has this obstacle been thought up by unhelpful officials?
	Many of the transport problems in this country were caused by the Tories over 18 years ago—

Graham Stringer: Of course. The problems result from deregulation, under-investment, and the privatisation of rail. Having said that, I am also going to say something nice about the Conservatives. I do not often do that, so I have to put it in its real context. From the abolition of the Greater Manchester metropolitan council in 1986, which left no expertise on the new passenger transport authority, under a Conservative Government it took five years from the planning stage for the Queen to come and open the tram system in Greater Manchester. The applications for the extension of Metrolink have been in since the start of this Government. The Deputy Prime Minister gave his authority for Metrolink to go ahead in 2000. It is now 2007, and we are getting documents—a year late, according to the Government's own timetable—that directly inhibit progress. That is completely unacceptable, as far as I am concerned.
	I have talked a lot about trams, but there are two other schemes in Greater Manchester that provide an example of how the system is slow and fails to meet local priorities. The A57/A628 bypass round Mottram, Hollingworth and Tintwistle was agreed after public consultation in 1993. Tameside council wants it, Greater Manchester wants it, and there is no alternative. It has been through a whole series of reassessments under the previous Government and this Government. According to the latest projections, however, the earliest date by which it is likely to be completed is 2012.
	The other example is the Leigh guided busway. I have already talked to the Minister of State, Department of Health, my hon. Friend the Member for Leigh (Andy Burnham), about this matter. In a way, he is a good exemplar of the lack of understanding of what is local and what is national. Last Wednesday, I was in a very happy mood, having voted to abolish the other place. I was sitting down in the Strangers Bar to watch Manchester United go through to the next round of the European cup, when along bounced my hon. Friend. I was sitting with Councillor Roger Jones, the chair of the Greater Manchester passenger transport authority, whom the hon. Member for Orkney and Shetland (Mr. Carmichael) has already mentioned. My hon. Friend the Member for Leigh asked, "Where's my guided busway?" He should really ask his ministerial colleagues in the Department for Transport why a £26 million scheme that was agreed seven years ago and has had three public consultations—for planning, and under the Road Traffic Act and the Transport and Works Act—has still not been approved. The scheme is very pro-public transport and anti-congestion, and I hope that my hon. Friend and the people of Leigh get it. He should not, however, harass the chair of the passenger transport authority; he should harass my hon. Friends the Transport Ministers.
	The report shows that even in the context of the present local government settlement, the balance between central Government and detailed interference in national priorities, which sometimes has perverse effects at a local level, is wrong. The Government need to take more notice than they have done of the Transport Committee's report.

Graham Stuart: It is a great pleasure to follow my hon. Friend the Member for Reading, East (Mr. Wilson) and other Members who have spoken. The need for the Government to let go has been highlighted in all contributions—not least that of the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), and the report of the Transport Committee, which she chairs, also makes that clear. That is the consensus across the House; the only Members who do not share it are those on the Government Front Bench. Why? We heard in an earlier debate that the Chancellor of the Exchequer has damaged health by centralising control, and that is also happening with transport.
	I intend my remarks to be brief—although I realise that Members often say that but fail to deliver. Yorkshire receives significantly lower transport funding than the national average. It is a dynamic area of the country, but many of its areas are in need of regeneration—a fact that Members in all parts of the House have mentioned. Many Members from different parties attended a reception last week at which the case was put for greater funding for Yorkshire. I hope that the Minister heard about that reception, and that she will receive inputs from Members across the political spectrum in support of Yorkshire's case.
	If Yorkshire were to receive fair funding—the national average outside London—proper attention could be paid to regenerating the Humber ports, which offer fantastic opportunities for economic and social improvement. If the Government, especially the Treasury, were to sort out their priorities, we would look at several matters, such as the ludicrous Humber bridge charges, which cause great hardship to those who need to access hospital services on the north bank and have a depressing economic effect on the whole region, particularly on the south bank, but on the north bank too. The Exchequer loses vast sums because of that failure of joined-up government. I hope that the Minister will be able to speak to colleagues in the Treasury and put the case, which I know is strongly felt by Members who represent the area, for lowering the charges and writing off some of the debt, which is spiralling and will never be properly repaid by charging to cross the Humber bridge.
	Fairer funding would also, and more directly, give the opportunity to revisit the issue of the Beverley to York railway line, and indeed that of the whole corridor from Hull to York, which could play an important role in the regeneration of Hull and allow us to capitalise on the contribution that the Humber ports make to the country as a whole. I pay tribute to the Minsters' Rail Campaign. It has for many years been chaired by my Labour opponent at the last general election, George McManus, who has persisted in pushing the case of the Minsters' Rail Campaign to reopen the Beverley to York railway line. The East Riding is an economically successful area of the country. It is fortunate in having a Conservative-led council that has the highest financial management rating in the country and is graded as excellent in its ability to implement transport schemes. Will the Minister consider the Beverley to York railway line?
	Will the Minister also consider the need to upgrade the A1079, on which there have been 16 deaths in five years and hundreds of casualties? I am grateful to her for meeting the right hon. Member for East Yorkshire (Mr. Knight) and me to discuss that issue. The road goes from Hull to York and is vital for businesses and economic activity. Its current condition leads to substantial safety considerations. The Minister has agreed that her officials will work with our local authority in any way that they can to help it to get the best possible bid and to consider properly any bid that comes in. I know that people in Beverley, Holderness, Hull and York and all the areas in between look forward to that road being seriously improved to the benefit of the whole area.
	The theme of the debate so far has been the recognition that centralisation is not working and that we need innovation. There is no point in having a highly centralised innovation fund and falsely presenting it to the House as something that will create new ideas locally. It turns out that the fund will be even more centralised than current funding and can be used only to implement Government policy. The Chancellor's obsessive centralisation is damaging health delivery, as we have heard, and is also damaging the implementation of transport strategies. People in Yorkshire are browned off about health and transport; motorists and rail passengers are also browned off. It is time for a change. It is time for transport that works to be delivered through local ideas, control and leadership. That seems to be a common theme across the House. I hope that the Minister will announce a U-turn in Government attitude.

Clive Efford: The thrust of the Select Committee's report focuses on how the relationship between local authorities and central Government should develop. The debate has highlighted the contradictions in people's approaches to the issue.
	The hon. Member for Reading, East (Mr. Wilson) began his speech by suggesting that the Government were at fault because they did not intervene in a difference of opinion between a section of the community in Reading and the local authority over its decisions. He then complained that the Government are trying to impose policy from the centre. That demonstrates one of the difficulties with ensuring that the relationship between the Government and local government decision making reflects not only the policies of the Government, because they have an interest, but local needs. It must respect the fact that the people who are closest to the local community, and who are more directly responsible to it for week-in, week-out and year-in, year-out decision making, are best placed to respond to local needs.
	Without turning the debate into too much of a political knockabout, I make the point that Conservative Front Benchers have argued that congestion charging and local road charging should be a matter for local government, but we know that Governments are under a great deal of pressure to address climate change. Should the country ever make the mistake of re-electing a Conservative Government—

Clive Efford: I think that both hon. Gentlemen will be drawing their pensions long before that happens.
	I can imagine a future Prime Minister going around the Cabinet table and asking how each Department is contributing to tackling the important issue of climate change, and the Transport Secretary saying, "I am delivering nothing because local government will not play ball." I really do not see that as a credible position, but, at the same time, there has to be some degree of local autonomy. That highlights the difficulty that we face in debating these matters.
	We have a democratically accountable transport authority for the whole of London and my area provides an example of some of the difficulties that communities face in getting a London-wide authority to pay attention to the minute detail of some of the transport issues at a local level. The authority looks at the broader picture. It quite rightly holds up the fact that it has been able to transfer a significant number of people from private cars to public transport and points to that success. But, at the same time, when local communities ask for minor alterations in bus services and extensions to local transport services, they find that their voices are drowned out in the wider context of the debate about London-wide transport issues. It is difficult for communities to get themselves heard. That is an example of what we are talking about in terms of the relationship between local government and central Government.
	In an intervention on the hon. Member for Orkney and Shetland (Mr. Carmichael), a Conservative Back Bencher asked whether infrastructure should be put in place before major developments such as the Thames Gateway. The hon. Gentleman gave a rather curious answer. He seemed to suggest that we should hold up regeneration in the Thames Gateway area until such time as we have developed the transport infrastructure. I must point out that one of the most significant developments is going to be Crossrail. If we were to postpone development of the Thames Gateway area to wait for Crossrail, there would be significant suffering for people in that part of London. I suggest that he might want to reconsider the position that he adopted in his response to that intervention, because it certainly does not make any sense. I grant that it is desirable to put all transport infrastructure in place before development takes place, but if we were to postpone development until projects such as Crossrail were in place, we would be making a serious error and we would be perpetuating the suffering of a lot of people in the south-east who need that development.  [ Interruption. ] Yes, they will also need the infrastructure.

Graham Stuart: The hon. Gentleman is asking about a peculiar answer from the Liberal Democrats, which is hardly unusual. But he himself seems to be suggesting that, because the Government are incapable of delivering transport projects—as the hon. Member for Manchester, Blackley (Graham Stringer) laid out very well—housing development must go ahead, even though there will not be the infrastructure to support it. Surely it is not unreasonable to suggest that a co-ordinated Government should be able to put infrastructure in place before the people who need that infrastructure are living there.

Clive Efford: If the hon. Gentleman considers what he is saying, he will realise that there is transport infrastructure in place already. What we are talking about is expanding that infrastructure. That is essential to the development of the Thames Gateway area, which will take place over the next two decades. But I suggest that if we were to postpone decisions and postpone putting in place some of that development until that infrastructure were in place, that would make no sense.

Clive Efford: I agree with my hon. Friend to a certain extent. She tempts me to debate the whole Crossrail issue, but I urge my hon. Friends on the Treasury Bench, as well as my right hon. Friend the Secretary of State for Transport, to consider the proposals for the Crossrail station at Woolwich. By comparison with any other station on the Crossrail line, we are putting in a large amount of private sector funding for the station at Woolwich to make its funding stack up.
	My last point is about regeneration. Local authorities that gave evidence to the Select Committee were clearly confused about whether regeneration as part of their local transport plan would score well in terms of the investment their proposals would attract from the Department for Transport. If we are looking to local government as the driving force for regeneration in an area, regeneration must be an essential part of its transport infrastructure development. I urge the Government to clear up the confusion about the score attached to regeneration when local transport authorities are developing transport plans.
	I return to the example of the Crossrail station at Woolwich, as it will be essential for my community, which is south of Woolwich. The station is vital not only as part of the regeneration programme to meet the needs of the north Kent and Thames Gateway developments, but also for the wider community. One of my concerns about some of the infrastructure development that has already taken place is how people in communities not immediately adjacent to new stations and train lines will access the transport hubs that are being developed in the second phase. In particular, how can we reach deprived communities that could benefit from the new transport schemes? How do we provide links that benefit the wider community, not just people who live close to major infrastructure projects, or have easy access to them? Such projects have an impact in localities where they can assist in tackling social exclusion and increase participation in the economy. Their value cannot be overstated. It is essential that we take a wider strategic approach to major transport programmes. Local transport plans are at the heart of delivering them. In the relationship between central and local government, we need clarification of the role that regeneration plays in the development of local government plans.

Stephen Hammond: The hon. Gentleman is right, but he should not forget that the Government punted the issue into the long grass by referring it to the Lyons committee, which did not need to consider it.
	We have been discussing an excellent report that makes sensible recommendations and is the result of detailed analysis. The report makes interesting criticisms of the Government. I look forward to hearing the Minister's response to several of those points. As the hon. Member for Manchester, Blackley said, before we look at the report in a great deal of depth, it is instructive to explain the context of the situation and some of the promises that the Government have made over the past 10 years.
	The infamous transport plan of 2000 hangs like a millstone round the neck of Ministers as they pass in and out of the Department for Transport. The plan promised 200 major local road improvements and 70 bypasses. I am sure that the Minister will tell us exactly how many of those improvements and bypasses have been funded and built. On heavy rail, the plan said that the Government would provide new capacity to meet new demand and to improve the quality of services—two more failures there.
	The plan promised to
	"fund a substantial increase in the role of light rail in our larger cities and conurbations over the next ten years."
	It went on to promise 25 new light rail schemes. Later, the Minister will be able to stand up and count on the fingers of her left hand the number of light rail routes that have been introduced under the Government. The hon. Member for Manchester, Blackley made the point that funding approval has been revoked or turned down over the past couple of years for schemes in Manchester, Leeds, Liverpool and south Hampshire. Indeed, when the Transport Committee examined the matter in the last Session, it highlighted the clear tension that existed between local and central Government on light rail. Its report said:
	"Disappointment over the Department's decision to revoke funding for some Major Schemes has raised the profile of the relationship between the Department and local authorities in the context of projects such as light rail. There was severe criticism of the Department's decision to reject schemes which local authorities had judged to comply with national transport strategy and priorities, and present good value for money."
	That report echoes some of the criticisms about which we have heard today. The Department for Transport's changes to, and delays in, policy have added significantly to the cost of various schemes, and its value-for-money criteria are, at best, opaque. Local authorities have pointed out that they had little idea of what the Department was trying to achieve, of why their light rail schemes had been rejected, and of what they needed to do to get those schemes approved. Many of the targets in the 10-year transport plan that were set out in 2000 have not been achieved, and now the targets have been quietly dropped and are nothing more than aims.
	The hon. Member for Crewe and Nantwich said that local transport was a partnership. It is key to vibrant local communities and the lifeblood of local economies. The local transport that is provided in an area can define the area, its community and its economy. Local authorities are responsible for the provision and funding of such transport, but the funding comes from both local and central Government—that is the partnership. The interrelation between those two aspects of government defines how effectively transport is delivered. Whatever the Government's plans for the funding of local authority transport, one must hope, in the spirit of partnership, that they are somewhat better, and have more longevity, than the 10-year plan that was produced in 2000.
	The Government have talked a lot about devolving power to local authorities, but the harsh reality for many local councils is that the Government are imposing more responsibilities on them without the requisite extra funding. The fact remains that when it comes to transport, local authorities' freedom of manoeuvre is woefully inadequate, as authorities are entitled to bid for central Government money for local schemes that meet local priorities only if those local priorities are in accordance with the Department for Transport's diktat. That is one of the clear themes that comes through in the Select Committee report.
	In 2000, alongside the 10-year plan, the Government introduced a new framework for transport planning by local authorities, the local transport plan, and that is the essence of what the report is considering. The local transport plan imposed on authorities the obligation to produce a local transport plan every five years. The first phase was 2001-02 to 2005-06, and the next round, which is taking place at the moment, is 2006-07 to 2010-11. A notable feature of the local transport plan's first round has been the cost associated with the plans' production. The Select Committee report cites the average cost as being between £50,000 and £200,000 per county council; in metropolitan areas, the cost is significantly greater.
	The report comments that the second round of the local transport plans has continued that trend. The Committee says that the production of Manchester's second-round local transport plan is reckoned to cost some £500,000. One wonders how much that would buy. How many improvements could be made to buses in Manchester town centre or on the Oxford road corridor for that amount? Yet that is just the cost of preparation. The preparation costs for the scheme are at a level that raises questions about the scheme's benefits. Are the local transport plan production costs proportionate to the investment secured, or the new transport schemes delivered? I look forward to hearing the Under-Secretary of State for Transport, the hon. Member for Lincoln (Gillian Merron), talk about the proportionality of costs.
	In introducing the debate, the hon. Member for Crewe and Nantwich talked about delivery, and the report is scathing on the subject of the delivery of transport improvements. Its conclusion is that little has been delivered, despite the capital investment made. To quote the report,
	"The gap between what was anticipated and what has been delivered in terms of local transport improvements makes it difficult to judge what has actually been achieved."
	Furthermore, it says that
	"on the existing evidence it is disappointing that there were not more transport improvements delivered".
	The Government's response to that criticism was to comment that there have been "substantial improvements"; I am sure that the Minister will expand on that in her speech, but there was no qualification or quantification of the statement. It is instructive to note that the other knee-jerk response, which is to say, "We've put the matter out to consultants, who will issue a report", was used, too. How long will that take, and how much will it cost?
	It is clear that the costs of producing local transport plans must have diminished the delivery of improvements. The guidance to local authorities has at times hindered the delivery of those plans, too. On that subject, there is criticism in the report about the guidance, but the Government's guidance is often less than transparent on other occasions as well. I was alerted to that particular feature of the Department's performance last week, in a slightly different context, when I spoke to the councillor responsible for transport for Christchurch borough council. When concessionary bus fares for senior citizens were introduced last year—the hon. Member for Orkney and Shetland (Mr. Carmichael) mentioned that earlier—local authorities were warned by the Government that they would have to notify bus operators of the arrangements for reimbursing them four months in advance of the April start date, or they might face action against them. The only trouble was that the Department issued the guidance in mid-January.
	We have spoken about first-round costs, but it looks like the second-round plans will incur extra costs, as the Department for Transport has issued revised guidance. Clearly, there has been recognition that the guidance associated with the first-round plans needed change and revision, but the Department's failure to alert local authorities to the fact that revised guidance was being introduced has undoubtedly caused a number of local authorities extra problems with delivery, and has resulted in extra costs for their bid preparation. The Select Committee report highlights that, and it will be interesting to hear the Minister's response on that point.
	The Department believes that the second round of guidance on plan preparation is less prescriptive than the first, but it is the only body that believes that; the view is shared by no one else. The Local Government Association said that the prescriptive nature of the guidance altered the relationship between the Department and councils. The reality is that although the Government provide extra funding through local transport plans—I shall come on to that in a moment—they seek, too, to override the local aspect of those plans. They speak about local plans and local action, but they are a centralising Government. It is possible to have a local plan if it fits central Government requirements, and that trait has become even more evident in the transport innovation fund that the Government have introduced.
	The Select Committee's report rightly makes the point that over-prescription of guidance has increased the costs and production time of local transport plans, without creating any greater certainty about funding, fulfilment, or indeed about delivery. What should a local transport plan comprise? Should it best reflect the needs of the local community and the local authority, or should it recognise the uniqueness of a local area, bearing in mind the fact that areas differ from one another? The answer is yes, but not in the Department for Transport. In 2002, the Department supposedly shared with local authorities priorities such as accessibility, congestion, air quality and road safety. Those are the Department's priorities, because it believes that local authorities are responsible for "delivering national transport objectives." If those four priorities reflect the priorities of local authorities, all is well. If they do not, the Government will use them to restrict what local authorities can implement, and much has been made today of the fact that regeneration criteria have been left out of those plans.
	The over-prescription and overriding of local priorities is highlighted by the fact that the revised guidance contains 16 pages on shared priorities—namely, the Government's priorities—and only two on other local priorities. Yet again, the Committee's report consistently highlights the fact that the Government speak about localising but act by centralising. Local authorities do not believe that they are free to set their own priorities; they believe that local transport plans are scored on how well it delivers national, Department for Transport-set priorities. If local transport plans are to deliver local objectives, the Government must revise their guidance one more time. It must be less prescriptive, and it must ensure that the scoring procedure for the weighting of local priorities against national priorities is transparent. That recommendation is highlighted in the report.
	The Government's most recent transport scheme—the transport innovation fund—also highlights their centralising nature. It was announced in July 2004, and when it was re-announced in 2006, the Secretary of State announced that would be available only for packages aimed at tackling congestion and schemes that met productivity objectives. Yet again, the Government have centrally governed and micro-managed local transport. No one can be in any doubt that transport funding, via the transport innovation fund, is anything other than a national pot of money that carries national obligations for any local authority wishing to access it. My hon. Friend the Member for Reading, East rightly made that point earlier.
	I shall quote the Committee report one more time. It says that TIF
	"is nationally administered and bypasses the strategic frameworks provided by Local Transport Plans and regional transport strategies...it represents a move away from local determination."
	The theme continues throughout the report. The Government are not concerned about local priorities. My hon. Friend the Member for Castle Point (Bob Spink) is no longer in the Chamber, but on my visit to Southend, the councillors and officers of Southend borough council told me that they need to access funds for their local transport plan and, indeed, for a number of local transport improvements, but that they have no need for a congestion scheme. However, it is clear to them that if they do not include such a scheme in their TIF bid, they will not receive TIF funding. TIF is not
	"about local choice or local schemes...It is not about innovation; it is about central control."
	Excellent words, excellent summary; thanks once again to the Select Committee.
	The Select Committee makes some interesting points about funding in its report. First, it points out that in 2001-02 to 2005-06 there was an increase in capital funding available for transport. That is to the Government's credit. What is not yet clear is whether the increased capital resources in period 1 will necessarily be renewed into period 2. Paragraph 15 of the Government's response states:
	"The Government has set planning guidelines for investment in both block funding and major schemes that increase significantly",
	but elsewhere the Department states that authorities are encouraged to deliver their second round of local transport plan targets on the assumption that there are no new major projects funded by the Department. On one hand there is the promise of extra funding, and on the other the Government explicitly deny that it is available.
	As other hon. Members noted, the Department for Transport indicated that there would be extra capital funds for major schemes. During the first phase of local transport plans, the Government would not fund schemes below £5 million out of the budget, and authorities were not allowed to spend more than £5 million on a scheme without Government approval—a point raised by the hon. Member for Manchester, Blackley earlier. That resulted in a number of decisions being taken out of local authority control, where they might more properly have been made. It resulted in local authorities struggling to find funds to enable major schemes, and the limit of £5 million requiring central approval meant significant cost and time to prepare a bid.
	I recognise, as does the whole House, that the Department for Transport must ensure that the funding for schemes offers value for money, and that there must necessarily be a robust appraisal, but it is also clear that the bidding process is costly and in a number of cases diminishes the amount of funding available for delivery. The Department has stated that it is necessary for local authorities to undertake an appropriate level of appraisal work. True, but as the Select Committee report highlights the fact that it can cost 5 to 15 per cent. of the total cost of the project just to get a scheme to the stage where it can be presented to the Department for analysis, surely the Minister will agree with everyone else in the House and with the Select Committee report that that is suboptimal, especially as the report states:
	"Rejected bids are likely to increase in number."
	The process is costly, and it is not clear whether there will be new central funding for major schemes between 2006 and 2011. The Government appear to be indicating that they will consider only major schemes already at provisional approval stage, and have said that it should be assumed that no new major schemes will be funded. That will inevitably undermine the efforts of local authorities to transform and revitalise their local transport networks. Yet again, the Government are talking big but failing to deliver, and talking local but centralising in action.

Gillian Merron: I am pleased that we have debated local transport planning and funding. The subject is vital to achieving the Government's goals for transport. I am grateful to my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) and her Committee for their work. It has informed us in the Department, as it always does.
	I am also pleased that the Select Committee chose to hold an inquiry into local transport planning and funding last year, and I welcome scrutiny of this important policy area. The Committee took evidence from many eminent and expert witnesses, including my hon. Friend the Minister of State. Hon. Members will have to decide for themselves whether he is eminent or expert, or both. I would suggest both.
	I welcome the Committee's support for the principle of a local transport planning framework. That is clearly within the Committee's thoughts. It is a core responsibility of local government. I am pleased that alongside the concerns that the Committee has highlighted, it has also welcomed many of the key recent policy developments, which include introducing a formula to distribute the funding support for local authorities for smaller schemes and changing the arrangements for councils to report progress to the Department. The Committee rightly identified those as necessary.
	I want to make some underlying points before addressing the particular points raised. Local transport plans are making a real difference. Substantially larger capital budgets are being spent on local transport. Government funding support has more than doubled compared with a decade ago. The investment has contributed to continued major reductions in serious casualties on local roads and even more rapid falls in the number of those who are seriously injured on our roads. I regard that as progress. That has also reversed the long-term underinvestment in road maintenance. Again, I consider not only halting but reversing the decline in road conditions to be a major advance.
	A broader range of projects is being delivered. Measures are being taken locally to manage the use of cars more effectively and to encourage alternative ways of travelling. There is more consultation with stakeholders and the public, which I welcome. More effective schemes are being delivered, and delivery of schemes is being focused on the intended outcomes, a point to which I shall return later. Those are not just my opinions; they are some of the findings of the independent evaluation that the Department has set up in respect of this policy.
	I recognise that more needs to be done. The Secretary of State and I have undertaken a review of bus services: in some areas, we found real improvements being achieved in partnership between bus operators and local authorities, but all too often, as hon. Members have mentioned this evening, the current framework is still not delivering the services that passengers rightly expect. In December, we set out proposals in "Putting Passengers First" to modernise the framework to improve delivery, which was, of course, the biggest shake-up of bus services for 20 years since deregulation by the Conservative party.
	The Stern report highlighted the challenge of climate change, which is a key challenge for transport including for local transport planning. Over the past three years, the Department for Transport has worked closely with the Department for Environment, Food and Rural Affairs to foster links between tackling air quality and transport problems locally, which cuts across tiers of councils and across government. The broader issue of climate change is one to which we will apply ourselves even further as we develop local transport planning, and I know that many local authorities welcome that approach.
	The Eddington study examined the effects of transport on economic growth, competition and productivity. The local transport plan framework provides a way of considering action on transport locally in the context of wider issues, which the Conservative party has not acknowledged this evening but which we know takes place in reality. The Eddington study highlights buses in urban areas and sub-national decision making as critical delivery areas. We will therefore consider the findings of the study as we develop the local transport planning framework. All those points are responses to studies conducted outside the Department.
	Last autumn's local government White Paper, which has been referred to this evening, sets out this Government's vision of revitalised local authorities working with partners to reshape public services around members of the public and the communities that they serve. That means changing how the Government work with local authorities, so for local transport planning we are introducing less burdensome reporting to Government and providing more choice for localities to deliver the solutions that are right for their circumstances and priorities. I hope that that has addressed a number of the concerns raised in the House this evening.
	I value the Select Committee's report as we consider the way forward for local transport planning.

Gillian Merron: My hon. Friend the Minister of State heard my hon. Friend's comments. I confirm again that the Government are not anti-tram but that the right solution has to be found within the resources available. There are occasions when the bus is a better, cheaper, more effective and economic alternative.
	I was interested that the hon. Member for Reading, East (Mr. Wilson) talked about the Government playing "fast and loose". I have never known that said of a Government who have given conditional approval to a scheme to improve junction 11 of the M4 and make related improvements to Mereoak junction, which will allow Reading to invite tenders for construction. The Government expect to provide more than £62 million for the scheme, which will ease congestion on the main access from the M4 into Reading. If that is playing fast and loose, many hon. Members would welcome it.
	The scheme for Reading station was originally developed by the council with Network Rail. Following further review in the emerging conclusions of the Intercity Express project, a larger scheme than was originally envisaged is now required at Reading to create an interchange that is capable of handling the forecast growth in passenger numbers, including the possibility of new direct airport services. Key stakeholders, including my hon. Friend the Member for Reading, West (Martin Salter), support that view. The Thames valley regional planning assessment for the railway is in the final stages of development and is considering the required upgrade of Reading station. We hope that the required documentation will be published around Easter.
	On the Reading inner-distributor road, I, like my hon. Friend the Member for Eltham (Clive Efford), was somewhat confused because it appeared as though the hon. Member for Reading, East wanted local decisions at all times unless they were not the decisions that he supported. To clarify, I am aware that this is a controversial scheme. However, it is proposed in order to address congestion, which we all know needs to be done, and I also emphasise that the Department for Transport is not being asked to contribute any funds. I am aware that Reading borough council is fully apprised of the requirements on it.
	I would like to say a few words of clarification about the transport innovation fund. That is extra money allotted for an additional purpose: that fund is not taking money from anyone and no one is forced to apply for it. It has a separate set of requirements and criteria. It is intended to deal with both congestion and productivity. It is important to clarify that, as a misleading or strange impression has been created that TIF is somehow taking money away, but it is not.
	We had some discussion of road pricing, on which I am interested to see that the Conservatives have many views. The hon. Member for Epsom and Ewell (Chris Grayling) said:
	" Demand management is an option and we will look very seriously at road pricing."
	The hon. Member for Tatton (Mr. Osborne) said that the Conservatives were
	"sympathetic to the concept of road pricing",
	and the right hon. Member for Witney (Mr. Cameron) said:
	"Britain now needs a concerted programme of road building, accompanied by the introduction of advanced traffic management methods, including new solutions for road charging based on usage and the time of day".
	It seems to me that there is quite a lot of support among those on the Conservative Benches for the transport innovation fund, which I am delighted to discover.
	The hon. Member for Beverley and Holderness (Mr. Stuart) referred to Yorkshire not receiving enough money. Well, I must put further questions to the hon. Gentleman. From where would he seek to take the money and how on earth can he reconcile the call for more money for his own region with the various points put forward by his party about plans to share the proceeds of economic growth, which is a code for tax cuts? Indeed, in an article on ConservativeHome, which has since been removed, the hon. Member for Wimbledon called for £20 billion of cuts, and the Forsyth tax reform commission advocated £16 billion-worth of cuts. I understand that hon. Members always want more resources for their own area, but it is incumbent on us to show some responsibility and say where that money will come from.
	My hon. Friend the Member for Eltham made the point, as forcefully as always, about the need for a further station in Woolwich under the Crossrail development. I have noted that and I can confirm that the Secretary of State is looking further into the matter and has committed to reporting back to the Select Committee on Crossrail.
	This has been an interesting debate. I have not recognised all the reflections on the Government's local transport policy, but I can say without any doubt that more funding and more effective planning is going into local transport today than was the case 10 years ago. The Select Committee supports the principle of local transport plans and I am grateful to it. I also welcome the constructive points that have been put forward. I can confirm that we are aiming and working towards further improvements in our support for local authorities so that they can achieve even better results in serving the people for whom they work. I hope that the House will support that.

Jeremy Browne: The context of this debate is the Government's recent announcement that people will be required to attend one of 69 passport interview centres, scattered throughout the United Kingdom, if they wish to apply for a British passport for the first time. In future all applicants for passports, including those renewing or replacing lost documents, will be required to report to one of those centres. My bone of contention is that Taunton, the town in Somerset that I represent, is not one of the 69 centres chosen.
	I want to make two points at the outset. First, my support for Taunton being one of those passport interview centres should not be taken to imply that I am in favour of identity cards; quite the opposite. It is extremely important that we maintain a healthy balance between the power of the state and that of the individual citizen. In a liberal democracy, the Government should be answerable to the people, not the people to the Government. I continue to be mystified and saddened by the inability of many Labour Members of Parliament to understand the importance of a liberal and benign state having proper safeguards against such measures.
	Secondly, as a preamble, let me say that I do not have absolute confidence that the new system of passport interviews will work as well as some in the Government might hope. Its implementation has already been delayed: it was meant to come into effect last year, and is now coming into effect this year. A Home Office spokesman was quoted recently in a newspaper as saying:
	"Customers who have not been contacted by the IPS"—
	the rather Orwellian-sounding Identity and Passport Service—
	"within 8 working days from receipt of a completed application form will not need to have an interview."
	It is not beyond comprehension that the system might not process everybody as effectively as the Government wish. From 2009, the system is being extended to cover about 4 million applications per year.
	My principal interest, however, is in the lack of a passport interview centre for Taunton, rather than in the merits or otherwise of passport interviews per se. It might help the Minister and other Members, who might not have been to Taunton, if I explain why it is so important that such a centre be provided.
	Taunton is the county town of Somerset and the home of the county council. It is also the town in Somerset with the largest population, by a significant margin. But even that understates its place in Somerset. As well as being the largest place and the county town, it is a big centre for employment, leisure and shopping. I always think that one can identify such a centre by asking people where their nearest branch of Marks and Spencer is, and for many people, not just those who live in the town, it is in Taunton. Musgrove Park hospital, the largest hospital in Somerset, draws in patients from across the county. Taunton therefore serves a much wider area and bigger population than its own.
	Under the current arrangements, people from Taunton will be forced to go to one of four places in rough geographic proximity to the town to be interviewed for a passport. Those places are Exeter, Yeovil—the only one in Somerset, despite being only about two thirds the size of Taunton in terms of population—Bristol or, perhaps, Barnstaple in Devon. According to the Government's own reckoning, people should be able to get to one of those centres within about 30 minutes following a journey of about 20 miles, but here it was thought reasonable to allow for a 40-mile journey and a journey lasting an hour rather than half an hour.
	A theme to which I shall return is that Taunton falls between two stools. It is not a metropolis—it does not provide the ease of communication provided by London and other big cities—but nor is it a remote rural area like the highlands and islands of Scotland. It suffers as a result of falling between classifications according to the Government's own criteria.
	When the 69 passport interview centres are introduced, people in Taunton may choose to go to the nearest town in terms of straightforward mileage: Yeovil, whose population is 41,871, compared with Taunton's population of 58,241. I apologise for all the figures that I am giving; they are necessary to illustrate my points, but I will try to keep them to a minimum.
	Yeovil is 28 miles from Taunton, so a 56-mile round trip would be necessary. The Government estimate that the one-way journey takes 48 minutes by car. Some people in Taunton may prefer to take the 47-minute journey to Exeter, which, being 36 miles away, is slightly further from Taunton, but is slightly quicker to get to because it is on the motorway. In either event, people would make a 56-mile or a 94-minute round trip to reach the nearest interview centre—and that is by car. Many people do not have access to cars.
	The bus journey from Taunton to Exeter takes about an hour and 20 minutes if there are no delays, while the bus journey to Yeovil takes about an hour and 15 minutes. Whether people can return to Exeter or Yeovil on public transport within a reasonable period will depend on the bus timetable, but it can safely be said that those who live in Taunton will have to take half a day off from their other duties and activities to travel to Exeter or Yeovil, or, if they prefer, to Bristol or Barnstaple.
	Although Taunton is the largest town in my constituency, I also represent a number of other significant population centres. The second biggest is Wellington, with a population of 13,696. People in Wellington would have to travel 28 miles to Exeter, 34 miles to Yeovil and further still to Barnstaple or Bristol, but only seven miles to Taunton. Many people in Wellington work or shop in Taunton. It is routine for people in Wellington to travel to Taunton; it is not routine for them to travel to Exeter, Yeovil, Barnstaple or Bristol—but that is what the new arrangements will require them to do.
	Another town in my constituency, Wiveliscombe, with a population of 2,670, is 11 miles from Taunton but, crucially, 29 miles from Exeter and 38 miles from Yeovil and Barnstaple. I say "crucially" because Exeter is, by the Government's own reckoning, one hour and four minutes from Wiveliscombe by car. That is above the requirement that the Government set themselves for rural communities, let alone what I regard as reasonable for people living in the Taunton area.
	I live in the borough of Taunton Deane, as do 102,298 other people. All those people would find it easier to go to a passport interview centre in Taunton than to a centre in any of the other towns. If Members envisage the number of people who would fit into the new Wembley stadium and then add 15,000 or so, perhaps standing on the pitch, they will have an idea of the population of Taunton Deane.
	There are other towns outside the borough of Taunton Deane whose populations would also find it easier to go to Taunton than to travel further afield. North Petherton, with a population of 5,190, is only eight miles from Taunton, but its inhabitants will have to travel to Yeovil, which is much further away. Bridgwater, a sizeable town in Somerset and outside my constituency, is just 12 miles from Taunton and handy to get to on the motorway; it has 36,563 inhabitants, and they will have to travel much further—again to Yeovil—for their interviews. Like Yeovil, Chard is in the South Somerset district council area; it has a population of 11,730, but it is closer to Taunton than to Yeovil. In the Burnham and Highbridge area there are 18,922 residents; it is 19 miles from Taunton, which again is closer than the current nearest interview centre, which for them would be in Bristol. Minehead on the Somerset coast has approximately 10,000 residents; it is 24 miles from Taunton, so that is not handy, but it is 40 miles from Barnstaple, its nearest interview centre, which is one hour and 20 minutes away. That is way beyond the Government's own travel criteria.
	The total population of those places is 82,405. Therefore, there are approximately 102,000 people in Taunton Deane, and approximately 82,000 in some of the significant-sized towns outside Taunton Deane, for whom travelling to Taunton would be more convenient than travelling to any of the current proposed passport interview centres. There are also many people in villages and rural hamlets outside Taunton Deane and outside those five towns who are nearer to Taunton than to any of the current proposed sites. Therefore, for a total of more than 200,000 people Taunton would be a more convenient and useful interview centre for passports than any of the mooted locations.
	When I found out about the situation I wrote to the Home Secretary, and I received a response from Mr. Bernard Herden, the executive director of service planning and delivery at the Identity and Passport Service. First, he said that the plan had
	"taken into account consultations with authorities and agencies responsible for sparsely populated areas".
	No consultations were held with the council covering Taunton and there were no consultations in surrounding constituencies within Somerset. There were consultations with areas such as the highlands and islands of Scotland, but I emphasise again that Taunton suffers from being neither a grand metropolis nor as remote as the islands off the west coast of Scotland, for example.
	The second point that Mr. Herden made was that an effort had been made
	"to strike a balance between keeping costs (and therefore fees) as low as possible while making journeys to interviews as short as possible".
	As I have said, travelling for 47 minutes by car—and a lot longer and further by public transport—to get to an interview is the bare minimum journey time for those in Taunton. Therefore, in my view that balance has not been struck, and more than 200,000 people, including many whom I represent, will also feel that it has not been struck.
	Thirdly, Mr. Herden stated:
	"In remote, sparsely populated areas...we are putting in place videoconferencing facilities".
	I suspect that the Taunton area is not regarded as sufficiently remote or sparsely populated to qualify for video-conferencing facilities, so we are again in the invidious position of falling between two stools: we are not big enough to meet the criteria met by a big city such as Bristol, but not small enough to be given special treatment.
	Fourthly, Mr. Herden said that
	"we considered both private and public transport".
	I am surprised by that, as 47 minutes by car—that is one way, and people are likely to want to come home afterwards—seems to me a substantial journey, but the journey by bus or train is likely to take a lot longer. Many people in my constituency do not have access to a private car, so for them, that mode of transport will be the reality.
	Finally, Mr. Herden said in his letter:
	"Each location has been selected as part of a mutually supporting network; no individual location can be changed without affecting the whole network."
	I do not accept that adding an office in Taunton would cause the collapse of the so-called network. It would increase choice and availability for more than 200,000 people.
	I was not consulted about the proposal, but I would happily have run through some of the points that I have made tonight had someone asked me, as the parliamentary representative of the people of Taunton constituency. Nor, as far as I am aware, was there any consultation with Taunton Deane council or Somerset county council.
	I do not seek the closure of any of the existing 69 centres, but because of the concerns and criteria that I have raised, the Government could reasonably look to include Taunton as a 70th centre. If that does not happen, people in my constituency will incur considerable personal cost in travelling to and from their passport interviews. That will also take up a considerable amount of their time. People come into Taunton, if they do not already live in the town, to work, to shop, to go to the bank and to take out insurance—all the everyday exercises. They could incorporate into that routine going to a passport interview centre, but instead they will have to spend at least half a day going elsewhere.
	I have not estimated the cost to the environment, but there will be one if large numbers of people are required to drive substantial distances instead of visiting a passport interview centre in Taunton, which is not only the county town of Somerset but its largest urban centre.
	I appreciate that many hon. Members seek to make representations to the Minister and her Department about what they perceive as unfair treatment of their constituents, but in this case there is a strong and compelling argument for Taunton to have a passport interview centre. It is a natural centre not only for people who live in the town, but for those who travel to it for work and other reasons. I urge the Minister to take my argument in the constructive spirit in which it is intended, and to consider whether it is possible to accommodate the requirements of the 200,000-plus people who live in and around Taunton and who would benefit from having a passport interview centre located in the county town of Somerset instead of having to travel further afield.

Joan Ryan: I congratulate the hon. Member for Taunton (Mr. Browne) on securing this debate and on the sterling job he has just done on behalf of his constituents. The Identity and Passport Service is introducing a number of counter-fraud initiatives as part of the continuing fight against attempted passport fraud and forgery. The changes are critical because of increasing attempted passport and identity fraud.
	One of the most significant changes is to the passport application process for first-time adult passport customers. The change, which was first announced to Parliament in December 2004, is designed to help to stop fraudulent applications by improving the integrity and security of British passports.
	The United Kingdom is currently one of the few western countries that do not require first-time passport applications to be made in person. The key benefits of the changes will be to help to fight passport fraud and forgery; to help to protect the UK public from identity theft; and to ensure that the British passport stays one of the most secure and respected in the world
	The introduction of passport application interviews will mean that all adults applying for a passport for the first time must attend an interview with IPS in person to confirm their identity. The Identity and Passport Service is an appropriate name for what is a very good service. I stress that the changes do not currently apply to people wanting to renew their existing passport. The requirement for an interview will apply only to those adults who have never previously held a British passport in their own name. That is estimated to affect approximately 609,000 customers a year.
	The interview process is normally expected to take about 30 minutes, including an interview of between 10 and 20 minutes. At the interview, customers will be asked basic information about themselves—not deeply private information, but information that only they will know and that can be checked to confirm that they are who they say they are. I should make it clear that people who apply for passports will not have to give any more information than they do now and that the application forms will be unchanged. The interview is not about gathering information and the information used in the interview will be deleted from IPS records shortly after the passport is issued. The requirement to attend an interview will be introduced gradually and I will make further information on that available in due course.
	As the hon. Gentleman said, IPS is opening 69 local interview offices across the UK. The majority of customers will be within 60 minutes' travel of an office from their home or workplace. The network of 69 offices has been designed to provide an interview office within 15 minutes' travelling time via public or personal transport for just over half the population of the UK. More than 95 per cent. of the population will live within one hour's travelling time.
	The interview offices will not be new passport offices. They will be used only to conduct interviews and will not handle general inquiries or take delivery of passport applications. It is important for the hon. Gentleman to know that the interview offices will be open on Saturdays. I am conscious that he feared that constituents might have to have to give up a whole half-day once every 10 years, but in fact it is quite likely that that will not be necessary. Each day that an office is open, it will be open from 8am to 6pm, except for the seven smallest offices, which will open only two half-days a week.
	Deciding the location of the new offices was a careful and painstaking task. The hon. Gentleman mentioned that the offices were scattered. Perhaps that was just his way of referring to them, but I can assure him that deciding the location of the offices was not done in a throwaway manner. We needed to balance customers' wishes for the lowest possible additional increase to the passport fee with their wishes for convenient locations. Customer research was carried out in March and April 2004 and in July 2005. The results of both surveys showed that the majority of respondents felt that a journey of approximately 20 miles or half an hour one way, once in 10 years, was reasonable. The research also identified that, as he said, in more rural parts of the UK that expectation increased to approximately 40 miles or one hour's travel time.
	The IPS used mapping software and census data to model an office network, which, over several months, was subjected to independent verification by a specialist company and local consultation with authorities that are responsible for more sparsely populated areas. The hon. Gentleman is right: we did not consult Taunton. But we did consult Cornwall county council, Devon county council and a whole list of others. The work that we did used a range of data from the 2001 census, including—this is an important point—information on the distribution of people aged 16 to 34, which is the age range when most adults apply for their first passport. That was broken down by local authority wards.
	As I said, initially it is people who are applying for their first passport who will be subject to interview, so mapping where that section of the population live and their travel routes was crucial when deciding the location of the 69 offices. Journey-to-work data that show the proportion of people who use each mode of transport in different areas of the UK were also used. Those data were combined with data on travel costs and times to model journeys from a total of more than 220,000 population centres, of about 250 people each, to 264 potential locations. I think that the hon. Gentleman is aware that Taunton was included in the 264 potential locations. However, when we whittled the number down on the basis of the information to which I referred Taunton was not in the final 69.
	The aim was to design a network that optimised the number of offices to minimise costs and maximise operational efficiency—for example, through lower fixed costs and overheads and greater staff flexibility to handle the peaks and troughs of demand—while selecting locations that maximised the proportion of UK residents who would need to travel no more than 20 miles to their nearest interview office. Not everybody will fall within that limit, and not everyone will be able to reach their interview office within the ideal time, but the overwhelming majority come within what we, and they, consider a reasonable time frame.